COLUMBUS, Ohio — In just a couple of weeks, millions of Americans will receive their W-2s. Tax preparers say there's two major changes that every American needs to be on the lookout for when filing their taxes.
- Simplified 1040-SR form out for American 65+ filing taxes
- Section for claiming allowances on W-4 forms removed
- Additional worksheets for those with dependents or if you're making adjustments
In between clients, tax advisor Tabatha Tomlinson with H & R Block in Columbus, pulls up a new, simplified form the IRS released for those 65 and older. It's a form that's taking the leg work out of the tax filing process and time spent thumbing through instruction books.
"The new 1040 SR, it spells out those extra standard deduction amounts. Like, it's really clear and you know exactly what dollar amount you're gonna get for your standard deduction," said Tomlinson.
It's a direct result of tax reforms that took place over the last couple of years.
But the biggest change of all this tax season is the 2020 W-4 changes. Tomlinson says the old W-4 was allowance- and exemption-based, but now "that whole claiming of allowances is gone from the new W-4."
Going through the new form, she explains that now it's more income-based and only asks you for dollar amounts to calculate your withholdings, instead of allowances. She says it's something that's more in alignment with the new tax codes.
"We are simply just saying, what's your filing status and then you'll notice on the form you only have to complete these other steps if you're married, filing joint or you have multiple jobs." Tomlinson said.
Making sure everyone in the office is on the same page, Tomlinson distributes the new form. She says while it is designed to help people better anticipate what their return will look like, this year may be worth having an extra pair of eyes to look over what you complete. That's because multiple worksheets have been added for people to fill out if they have dependents or other adjustments.
Plus, she says you want to make sure you don't end up with a large surprise on your tax return, as some have in previous years.
"What a lot of taxpayers found was okay, wait a minute. we lowered these tax rates and then I have less withholdings coming out of my paycheck. So, at the end of the year I paid less in, my refund went down," Tomlinson said.
As a tax professional, Tomlinson indicated that ultimately you want to do what you can to keep your money in your pocket, rather than overpaying the government. That's unless you're saving for something big.
She adds that this year is the year to take control of your money. Another way to do that is by filing early so that thieves can't cash in on your return or your identity.
For those looking to E-File, the IRS will begin processing those on January 27. The deadline to complete your taxes is April 15.