well what's up everybody! how you doing I got some major changes to discuss with
you guys in terms of the w-4 the IRS has gonna be tinkering with the w-4 and big
changes are coming and they're coming starting in 2020 as its planned at the
moment and so in this video I hope to to share shed some light on what changes
you can expect and how you might start to prepare for these changes my name is
Mike the CPA and on this channel here on money in life TV we make videos that
cover finances investing taxes and more if you haven't already subscribe to the
channel now might be a good time because as more information is released on this
and the changes start to come out on the w-4 I'm going to be sharing more and
more information about it and I hope to help eventually help you tackle it down
the line now I already have a very very detailed video on w-4 on the form how it
works how withholding works and all that good stuff and it's one of the most
technical videos I've ever produced on this channel I'm gonna link it down
below check it out if you have a chance now let's go ahead and let's just start
talking about some of the changes coming down the pipeline and why the IRS is
saying or why the IRS is thinking they need to change things so if you remember
if you're back at the end of 2017 in roughly December 21st 22nd of 2017
that's when the new tax cuts and Jobs Act was passed with that came major
overhaul with our personal income tax returns now if you remember one of the
things that went away after 2017 was personal exemptions
okay so personal exemptions went away after 2017 if you're looking at me if
you're through your phone through our from your computer screen and you're
like I don't even know what personal exemptions are don't worry the only
thing you need to know is that they're gone now because there's no longer
personal exemptions we have to move over now think of the w-4 look at this w4
inch screen well if you look at the line item or the box that talks about the
number of allowances you want to claim well that number
really coincided a lot with the number of personal exemptions you had and if
personal exemptions are no longer a thing and then you have this form over
here that wants you to claim the number of allowances based on personal
exemptions well there's kind of a problem the the the forms don't really
communicate anymore so the IRS is decided they need to do a major overhaul
on the w-4 and make the w-4 more in line with what
the new tax forms appear to be our new tax laws are under the tax forms and
Jobs Act make sure you cover the privacy issues people are gonna want to know
about the privacy issues don't worry chipper we're gonna cover
that we're gonna cover that so what the IRS is looking at doing ladies and
gentlemen is instead of having a line item that says personal you know what
number of allowances you want to claim they're gonna completely remove that
that's their plan now we're finally supposed to get a glimpse of this draft
form w-4 starting at the end of next month which is the ma 20 May 31st of
2019 is when we're supposed to be able to start to look this up and so you can
search that by looking up IRS draft forms w-4 and see if it comes up so
sometimes they they lag on that so we'll see but right now the expected draft
version of this new w-4 is May 31st of 2019 now they were originally going to
release this new w-4 in this year like towards the beginning of this year and
several organizations and people just spoke out and said wait wait wait wait
especially the big big payroll companies are these payroll processing companies
that do millions or hundreds of thousands of peoples of you know
payrolls they said whoa IRS whoa slow your rolls
slow your roll because there were so many new changes with the new tax forms
that you know these payroll organizations they they already had had
to make updates to the withholding tables because the the average marginal
tax rate decreased by 3% they already had their hands full with
that so they were able to convince the IRS to delay
posting that new w-4 until 2020 one of the new things that the IRS is looking
for too is proposing for this new w-4 is gonna be a new line item asking
employees to enter their estimated non wage income that is not subject to
withholding so right now when you go to work you you earn your paycheck those
wages are already subject to withholding so what the IRS wants you to do is now
report what other forms of income you have now a simple example would be
interest income dividend income and but they're gonna they're probably gonna
want to know more than that they're probably gonna want to know well do you
have real property income do you have business income there this is what the
kind of information they're looking for they want to know what other types of
income you have that you normally aren't forced to withhold money on a lot of
times people pay taxes on those other forms of income through estimated tax
payments but the IRS is now wanting you to basically compile an estimate and
project all of your taxable income for the year on this new w-4 form and
there's privacy issues we're gonna talk about that in just a second not only do
they want you to report and estimate all of your other forms of income but they
also want to know about what other itemized deductions and credits you
might have so they want to know if you're getting the child tax credit they
want to know if you're itemizing if you plan to itemize so basically what you're
doing as a as an individual as an employee is they're wanting you to do
full-scale tax planning based on what you made in the previous year and want
you to guess your income on all this non wage withholding income going forward
like I said on interest income dividends rental properties business income maybe
you have some side hustle going on they're gonna want you to estimate all
of that upfront so that basically the way I see it what they're really really
doing is they're they want you to they want their money sooner instead of
instead of waiting to pay tax on that money come April 15th they're gonna want
you to accurately reflect that on this new w-4
so they're so that you're withholding money on this throughout the entire year
and so they're getting paid they're really
getting paid sooner and they're hoping that the withholdings will be more
accurate accurate now this is from the IRS says the Treasury news release said
that launching the redesign form in 2020 will allow the Treasury and the IRS to
promptly implement changes to the withholding system ensure taxpayers have
a positive simplified experience that is the biggest load of BS I've read in
quite some time now like chipper mentioned earlier let's
take a moment let's talk about some of the privacy concerns around this new w-4
first of all right now when you're done when you fill out your w-4 you're
probably of when you give it to your employer you know you're probably used
to just giving them the information based on what you you know how many
family members you have and this and that what you're not used to doing is
telling is basically communicating to your employer
hey employer look I have all these other forms of income now they want you to
share that with them now the IRS doesn't care about your privacy
obviously they care about how that the main thing for them is how soon can they
get paid how soon can they collect that tax revenue but unfortunately with this
new w-4 it's basically putting people in a position where if you have some side
business going on or you have a lot of investment income now they're wanting
you to report that information on a w-4 and hand that over to your employer are
you fricking kidding me this is how ridiculous this thing is no do you think
so we I don't know if you've noticed but I've certainly noticed that in most jobs
now in most companies this they it's not so much about your skill it's not about
your performance necessarily it's all about perception so think of think about
this so think about trying to ask for a raise
and your employer decides they're gonna go open their file cabinet and see what
other sources of income the yurov already put down on that w-4 and do you
do you think they're not gonna look at that I'm pretty sure they are and that's
controlling impact and this is all my opinion but I'm thinking they could say
well Jimmy's got all these other forms then come they'll be fine or do you
think they're not gonna look at that and say oh look he's got a side business
doing inez trying to work here I don't know if we like that maybe we should
maybe we won't bring it up to Jimmy but we're gonna kind of pigeonhole them and
put a cap or nerf on its career because so many people have been outraged by
this and have been bringing this kind of issue up with the privacy concerns about
sharing this data with your employer there is supposed to be a workaround to
this so that you don't have to give all this information to your floor up front
but you're gonna but and I haven't seen anything yet I haven't seen in it yeah
but there's supposed to be some new online calculator that they're supposed
to come out with where you can enter that information all online and and get
their correct numbers there so that you don't have to share all of this
information with your employer I don't know how it's gonna work yet I'm still
waiting to see how they're gonna do it or how that's gonna look but I'm gonna
be covering this as time goes on and as I learn and you know more about it and
once I learn more about it I hope to be able to help all of you because there's
millions of people across this country that this is going to affect myself
included once I know how to get around it or if there what ways that we can
implement to get around this I will let you guys know w-4 ah thank you for the
reminder chipper so chipper has been making some good points about this new
w-4 is that and one of the besides the whole privacy thing that's one issue but
there is a massive massive knowledge gap when it comes to taxes and so being able
to knowing even even if you wanted to get around filling out the w-4 and
handing that this information over to your employer and you wanted to use the
online calculator method you still have to have a good understanding of taxes
and wages and you know basically you would have to know how to do basic tax
planning now the good news is I've already put together a video on how to
project your taxable income and that's to help with tax planning you know it's
already on the channel I'm gonna link it down below and I have a template in
there that you can implement you can use for yourself to help project your
taxable wages now what I'm going to have to do with that
as more information comes out on this w-4 is I plan to update that for other
categories of income so that I can show you guys along the way how you might
look at projecting your future income going forward and so you can get around
and this whole privacy issue and still keep your your other sources of income
confidential and so I'm gonna I'm gonna show you guys you know I'm gonna share
that template with you guys in that video so check it out and I'll be making
further updates to this as time goes on alright ladies and gentlemen I didn't
make this video to scare you I don't want to scare you but I just want to
make you aware of what's coming and some of the issues around it now I do think
it's not all bad the only good side is that if you if you take the time to do
tax planning for yourself or work with a professional to do it you're gonna have
a better understanding of your overall taxes which you might make so there are
some positives there of knowing how to actually project your taxable income
going forward and knowing where you're gonna end up tax wise so that's that's
the good thing the bad thing is like knowing how to do it so I hope with the
videos on this channels as you know guys I do make a lot of videos around taxes
throughout the year and I'll definitely plan to continue
producing videos in that area especially around this new w-4 so what you can do
now before as this information as we're waiting for this information to come out
is keep your copies of your tax return especially your most recent tax return
on hand see what you made last year and start planning out what you what you
plan to make in the future going forward into for 2019 use 2019 as a practice
year start thinking about it right now of okay in 2018 I made this much in
wages in 2018 I made this much in interest this much in dividends this
much for my side hustle my eBay business Etsy business whatever and start
projecting in 2019 what you think you'll make by the end of this year that's
gonna help you get ready it's gonna help you get in the mindset of what's going
to be required when it comes to filling out this new w-4 or working this new
online calculator that the IRS is supposed to put out I don't know when
they're supposed to put that out I have no idea but I'm gonna be tracking it and
be following it so like I said look for the draft version of the form and as
soon released I plan to do a video on it I'll
be looking for it at the end of May so the end of this month so I'm filming
this video on April 23rd of 2018 and and that's when so we're about a month away
from the release of that form with that being said if you liked the video make
sure you drop a like before you leave it really helps out the channel and helps
get this information out to more people definitely please feel free to share
this with a friend because there's a lot of people out there in this country who
have no idea that these changes are coming and most people have little to no
knowledge about taxes so I think getting that giving them a head start on this
information can really help them out and like I said earlier be sure to subscribe
if you have not already to the channel on money and live TV we're all about
helping people just like yourself become fiscally fit and we do that by teaching
finances investing taxes and more on a regular basis alright guys I love you
all thank you so thank you so much for all the support you've been showing on
the channel can't believe we're already at 18,000 subscribers you guys are
absolutely amazing and I love this community look forward to reading your
comments down below in the comment section and tell then take care and I'll
see you in the next video bye guys peace