In this video I’m going to talk about
the IRS Form w-4 for 2019 that’s updated I’m going to talk about the online
version and the paper version so if you’re confused about the IRS Form w-4
or your employer give you the paper version to fill out or you actually did
the online version and we’re totally confused when you got to the last screen
this video is for you but before we do if there’s your first time at our
channel or you haven’t subscribed click on the subscribe button at the bottom my
name is Travis Sickle CERTIFIED FINANCIAL PLANNER with Sickle Hunter Financial Advisors so the #1 question that I get with the IRS Form
w-4 is that I have the paper version so how can I do the online version I need
to figure out how to do that well the online version is definitely the way to
go and the IRS tells you right there on the w-4 so you really want to pay
attention to this video because I’m going to show you how to use the online
version so you can fill out the IRS Form w-4 but Before we jump into that I want
you to take a minute and put in the comments below what filing status you
are so there are 5 filing statuses and I’m going to pull them up on the screen
you’re finally either single married filing jointly married filing separately
head of household or qualifying widower so let me know in the comments down
below which filing status you are so I can make future videos that are tailored
for you so if the example that I’m going to go through in this video doesn’t
necessarily apply to you then in the future I can make other videos that
might help you a little bit more so that first question that I mentioned the IRS
Form w-4 the paper version which is right here this is the only part the
first page is the only part that you actually need to give to your employer
so you can see it right there I’ll zoom in on the screen here you see it says
separate here and give form w-4 to your employer keep the worksheets for your
records so if you’re going to use the online version you can print out the
last page it’s going to give you the results for your records or you can just
fill out the rest of the paper version and keep that for your records so in
this video we’re talking about the online version to use for the paper
version this is by far the easiest way to do it in the most accurate so if you
really want to pay the least amount access throughout the course of the year
you want to control your taxes you want to know what your tax liability is gonna
be the online versions the way to go the paper version really only works if
it’s January 1st because if you’re using it through the rest of the course of the
year even if you didn’t have a job previously it’s still not going to be
quite as accurate is if you used the online version so you don’t have to take
my word for it using the IRS form w-4 online estimator used to be called the
calculator now it’s called the estimator so what you can see here it says you can
use the calculator at irs.gov or slash W for a PP to determine your tax
withholdings more accurately they set it so it’s gonna be more accurate the way
to go consider using the calculator if you have more complicated tax situations
it’s it and going to all that so you really want to use the online calculator
IRS said it not me there you have it so let’s do the online calculator and make
this a little bit easier so if you didn’t catch it because I just said it
the link to the online calculator I’ll gonna put in the description at the
bottom or opinion that’s one of the first comments so you can see exactly
where the IRS Form w-4 estimator is at the end of the estimator it’s gonna show
you we’re just gonna give you an option of do you want a refund or not and it’s
gonna help you adjust it which is kind of a neat feature if you just want a
refund for whatever reason so here let’s go let’s jump into it let me set up a
scenario so you can understand kind of why we’re going through this so married
filing jointly in this scenario we’re gonna go married filing jointly one job
so there’s gonna be one income earner a hundred and twenty thousand and we’re
gonna have two kids so that’ll give you an idea of filling out the w-4 what it
looks like and if your situation varies again leave in the description at the
bottom what your filing status is and I’ll make sure that I update some of the
w-4 videos so you can use this online calculator and just pull it up right
next to the screen as you’re filling it out to make it as easy as possible so
this is the first screen that you’re going to see so we have our filing
status so again in our example we’re gonna make 120,000 married filing
jointly two kids I’m gonna point out that they’re both under the age of 17 so
let’s say where there are three years and five years old
so marry filing jointly right there and you can see that’s gonna walk you
through all these questions and another reason why I like this calculator is
because you can jump backwards and forwards without having to redo the
calculator so again married filing jointly can someone else claim you as a
dependent on his or her tax return the answer is no click no and the next
question is do you plan to claim dependents on your tat return so we are
we’re gonna have two kids whoops I’m going to say yes and then you’re gonna
choose the number I’m going to choose to of course choose whatever applies to you
for your income do you or your spouse hold a job with regular paychecks that
are subject to federal income tax we’re gonna say yes what would be the
alternative of that is if you’re an independent contractor but this
calculator might not work if you’re an independent contractor or you have a lot
of income from independent contracting type of work and also w-2 type of work
so you want to make sure that you’re filling it out correctly and if you’re a
w-2 employee then this forms for you so let’s go ahead and remember I said w-2
so that’s what you get at the end of the year the w-4 helps you calculate your
tax withholdings which all works for your taxes at the end of the year now
this might get a little confusing but that’s what you need to do so here we
see how many jobs you expect to hold this year so I said we’re gonna hold one
job now take a minute and understand that I put married filing jointly with
one job so if you and your spouse work then enter two because you’re you’re
filling this out together because at the end it’s gonna help you split up your
allowances so that’s gonna that’s going to be in the results page at the very
end so you and your spouse should be filling this out together so go ahead
and check off one or the number of jobs that you have or even had so if you had
a job this year and you’re starting a new job that’s two jobs and you’re going
to be able to put them both in here to get an accurate number how many jobs did
your spouse expect to hold and this year so let’s go ahead and put 0 will you or
your spouse receive income from pinched this year I’m going to quit off no and
then it’s going to populate some other questions so if you have other sources
of income it’s really important that you take a minute to read through this list
so if you’re receiving Social Security your spouse is getting Social Security
you’re gonna receive unearned income so the Social Security it’s not if you’re
withholding for Social Security it’s if you’re actually receiving Social
Security sometimes that confuses people so you
just want to make sure you get that right received unearned income such as
dividends interest in new ”tis alimony or a distribution from a trust receive
scholarships or grants collect unemployment compensation or net income
from self-employment self-employment so if your independent contractor
self-employment have have earned income from other
sources and you can click on the little question marks so the self-employment
net income this is the amount of income such as professional fees paid to you
and any other compensation you expect to receive for work performed in your own
business this year less deductible expenses and the last one have earned
income from other sources scroll down demographics will you be 65
or older on January 1st 2020 my score may your spouse will be 65 or older on
January 1st 2020 I’m blind my spouse is blind neither one’s true so in this one
I’m gonna click on next do you expect to hold a job all year I’m gonna click off
yes how frequently do you get paid so this is where you have to put in how
often you get paid and I’m going to put every two weeks so if it’s twice a month
you know that it’s always on the same dates that’s twice a month otherwise it
is every two weeks there’s a difference of about two pay period so it’s 24 pay
periods versus 26 pay periods I’m gonna go through that again sometimes that
gets gonna a little confusing if you get paid weekly pretty straightforward every
two weeks so that means it’s always on a different date but it’s every two weeks
that you’re getting paid so you get paid something like every other Friday that’s
every two weeks and if you get paid on something like the 1st and the 15th that
is gonna be twice a month and again a difference of two paychecks throughout
the course of the year so you want to make sure you get that right or once a
month again straightforward so I’m gonna put every two weeks on here so now on
this blast so on this question you can put on what date did your most recent
pay period and so go ahead and put that in here so I’ll
put in 115 – zero – zero one nine the Amanda bonus is zero use your most
recent pay stub so you have to go get your pay stub to see what’s already
being withheld and if you’re changing jobs then you need to know what was
already earned and withheld from that previous job so it’s we’re gonna go
ahead and enter it in here this is really important so it can make the
correct adjustment if you’ve been withholding too little or too much so
this isn’t a total number if you have multiple jobs it’s gonna walk you
through each job independently but you need to have all that information so it
can give you the final answer as most accurate as possible so I’m just going
to put in numbers I’m gonna put in five hundred again whatever is your
particular situation you have to look at the pay stub it’ll say it right there
the pay stub will show you what was withheld from the last paycheck and your
to date those are the two numbers that you’re looking for on your pay stub so
I’m just gonna make these things up for this example we’ll say that we withheld
three thousand dollars so far this year and five hundred from our last paycheck
obviously that math doesn’t add up but you’re gonna see at the end how it’s
gonna make this adjustment did you or will you contribute to a tax deferred
retirement plans such as a 401k so if we click on yes and then we say how much
we’re gonna contribute it’s gonna make the adjustment so let’s say we’re gonna
estimate that we’re gonna save ten thousand for the year reason that’s
important is because your taxable situation remember 401 K s traditional
401ks or pre-tax lowering your taxable income so in this example I said I made
one hundred twenty thousand but by putting that ten thousand in the 401k
pre-tax it’s lowering my taxable income to 110 thousand did you or will you
contribute to an HSA FSA or pre-tax childcare credit account or other
cafeteria plan I’m just gonna choose now if you have those expenses go ahead and
put them in there click Next adjustments to income I’m just going to go to the
next step so the next ones are looking at the deductions so we’re gonna take
the standard deduction so if you don’t have deductions that are over twenty
four thousand four hundred so last year for 2018 it was twenty four thousand
four Merida’s filing jointly it’s increased to twenty four thousand
four hundred dollars so unless you have a ton of write-offs on the personal side
then you’re just going to go with the standard deduction so we’re going to
take the standard deduction click on next and then it’s going to bring you to
the next section which is tax credits now remember we have two kids so that’s
going to be the child tax credit so we can see the tax credits and you said you
have two dependents is that correct yes we scroll down child independent related
expenses you can see here two qualifying children because I said in the beginning
that there were both under the age of 17 I said there were three and five years
old in this example then you can check off two and then a child an dependent
care tax credit so it’s the care portion to it not just having with the kids the
actual expenses for them it was like daycare select the number of qualifying
persons let’s say – actually I’m so let’s say zero let’s say we didn’t have
any expenses their Earned Income Credit what they qualify for let’s say zero for
that and nothing for the adoption so I’m going to put 0 for that as well and then
you could see the other credits now one that always jumps out that I always like
to point out retirement savers credit so if you’re eligible for the retirement
savers credit based on your income then you can enter it there you can go
through them I’m a little surprised that this calculator even asks you the
question for the retirement savings credit because it should be able to
calculate it for it so I don’t really know why it’s asking you for how much
you should you qualify for the retirement savings credit but it is so
if you do qualify for it go ahead and enter it in at at 110 120 thousand we’re
clearly over the limit for the savers credit so we’re just gonna click on next
this is what this is the results page and probably it’s a little confusing
well it’s it’s very detailed it’s not going to give you the answers that
you’re looking for I’m going to show you why but before we do that look at this
right here you can see the anticipated tax obligation is six thousand five
hundred and fifty five dollars and expect the tax withholdings was sixty
five hundred so the estimated under payment of $55
so you might be thinking well wait a second how do I fix that because I don’t
want to oh at the end of the year I’m going to show you that in a second but
before we do that I want to go back to how much we withheld to show you why
this is important so you can click on the little checks at the very top to go
back to that section so let’s go to incoming withholdings remember before I
said I made them up I said five hundred and three thousand let’s say now that we
would held $1,000 instead of the three thousand so let’s go ahead and click on
next and I’ll just jump to the results page by clicking on the last button
there that’s six and you can see that now or underpayment is two thousand
fifty five dollars but look at that or anticipated tax obligation is exactly
the same it’s not going to change so it doesn’t matter how much you withhold or
don’t withhold at the end of the year your taxes on is going to be in the same
it’s just a matter of whether or not you did it throughout the course of the year
now the law requires that you fill out the w-4 accurately and you would hold
throughout the course of the year so you can’t not withhold throughout the course
of the year and then pay it all at the end of the year but if you are adjusting
it by adjusting these numbers up or down just means whether or not you’re going
to get a little bit of a refund or get closer to nothing back so if you get a
bigger refund your paychecks throughout the course of the year are gonna be
smaller versus somebody who decides that they’re gonna be as accurate as possible
in the w-4 and get back basically nothing at the end of the year that
individual is going to have bigger paychecks throughout the course of the
year so that could be a huge benefit throughout the course of the year
because that could result in a tax-free loan to the IRS and who wants to do that
just give them a loan throughout the course of the year only to get in a
refund at the end of the year now if you’re a bad saver start saving and put
that money to the side if you think you’re just gonna spend it because you
have it in your bank account set up a system set up a strategy to get that
money out of your bank account into your retirement account or cash reserve or
just do better for yourself financially now
let’s look at this last screen again and we’re gonna adjust it one more time so
you can really get the point here incoming withholdings scroll down let’s
say that we withheld from our last paycheck a hundred dollars that probably
won’t change it very much at all and let’s say that this number is $8,000
something really high scroll down go to the last page again results and you can
see it their expected tax withholdings 8700 estimated to overpayment
where does an overpayment means you’re gonna get a refund 2145 dollars in this
particular instance so you can see this little speedometer that they have and it
goes all the way to the one side of the refund because we withheld too much now
look at these buttons now let’s jump to the buttons the buttons at the at the
bottom and this is the confusing part because what do you do with anticipate a
tax obligation of six thousand five hundred fifty-five dollars when you
filled out all this information it doesn’t do anything for you except give
you an insight as to how much your taxes are gonna be you can click on one of
these two buttons so we can click on get my balance close to zero or I’d like a
refund it’s kind of interesting so let’s click on zero so here’s your answer
that’s where the real answer is so let’s zoom in for this one so line 5 enter 24
wow that’s a huge number it could scare you if this was what you were doing
throughout the course of the year well I’m sure you’re not gonna withhold that
much but on line 5 enter 24 so this is where people get really confused because
they say well wait a second if I go through the paper version it says enter
1 for myself you know 2 or 4 or 0 for your kids depending on where you’re
where you are all this other information for your particular situation and then
all of a sudden you do the online calculator and it’s 24 and that is
because the higher the number the less withholdings that you’re gonna have to
make throughout the course of the year in our example we withheld just way too
much so we need to dial back the withholdings quite a bit in order to
make sure that we’re not just continuing to withhold way too much now let’s go
back really quickly again and look at what we make that adjustment
again so let’s bring this 8,000 down to $500 let’s say this is all we’ve been
doing throughout the course of the year go to the results page scroll down click
on get my balance close to zero and look at that on line five enter zero so
someone could have the same income same same filing status same household makeup
two kids and get a different result from somebody who’s doing exactly the same
things except they entered a different number throughout the course of the year
so their tax liability whether or not they’re gonna have to pay or get a
refund is gonna be different than somebody else’s so you can’t say hey I’m
married filing jointly I have two kids what should I put doesn’t work like that
so you have to make these adjustments now we can look at that other button and
since I’d like to get a refund it still says zero but on line six it says enter
five hundred and sixty three dollars and I think even on the getting to zero is
telling you to enter four hundred and eighty dollars yeah on line six and
through four hundred and eighty dollars it line six it just added adding
additional withholdings so you can see on line six on the paper version so this
is where you’re gonna fill it out we’ll go through it in just a moment but blind
six is additional amounts if any you want to withheld from each paycheck and
because we’ve put such a low number it has to play catch-up so zero seems like
a low number but that means it’s gonna withhold the maximum amount based on
your income for the calculator on the allowances in in addition to that you
have to withhold additional dollars of four hundred and eighty dollars now
again if we go back up to the top incoming withholdings
we go back down and let’s say that we’ve already withheld more more money
throughout the course of the year we enter in three thousand we go back to
the results and once again these numbers are a little different so you could say
on line six ends for sixty three or I want a refund enter one hundred and
forty seven dollars and there are a lot of other factors that could come into
play for your tax refund or payment at the end of the year review it as your
life changes as your situation changes if you get married if you get divorced
if you become a widow a widower you have a child all these instances are
gonna change or your child is over the age of 17 now they’re just a dependent
where they’re 17 or older and they’re just a dependent at that point so it’s
not going to be the $2,000 it’s going to drop to $500 so all these factors will
change the amount of tax withholdings on the w-4 so this is the only part that
you’re going to fill out for your employer all the rest are just
worksheets so you can take the answers from the paper version or the online
version and put them right on this page now all the basic information your name
goes here your last name social security number your home address city state and
zip and put your filing status right here so we were married filing jointly
so we’re gonna check off this check box right here go ahead and just check it
off and then you can see a line five and six those are the ones that are really
important now if your answers for whatever reason show exempt that’s line
seven but if they give you an answer to enter on line five line fives right
there so that’s where you’re gonna enter in that that information that we had
previously on line five line six is the additional withholdings go ahead and
sign it date it give it to your employer and they’ll eight nine and ten at the
very bottom that’s all for your employer so you don’t know that information if
it’s a home office or you don’t know what the day of your first and your
first employment date was or you don’t know your company’s CIA n which is their
the business is social security number then go ahead and give it to your
employers they can help you fill that out that shouldn’t be that big of a deal
but this is all that you need to fill out and hand to your employer the rest
of the pages or just for your records and don’t need you can’t even give them
to your employer they’re gonna give them right back to you so all you need is
this part of the w-4 so that is the online version and the paper version so
you don’t need to over complicate things by using the other worksheets on the
paper version go with what the IRS tells you to do use the online version it’s so
much simpler and you’re gonna get a more accurate answer pay the least in tax as
possible throughout the course of the year so you can put more money back in
your pocket and not have to wait until you get that refund because remember at
the end of the day it’s still your money it’s whether or not you want the
to hang onto it for you for the course of the year just to get it back in a
refund doesn’t make a whole lot of sense so go ahead and fill out the IRS Form
w-4 online fill out the bottom of the w-4 paper version to hand to your
employer so it’s really just about lines five six and seven if you’re exempt from
withholding any taxes lines five and six those are the ones that you’re gonna
deal with the most if you don’t have additional withholdings like line six is
zero just leave it blank or put a zero a – it doesn’t matter because your
employer is gonna take this information and apply it to the payroll so they know
how much to withhold that’s it that’s all you need to do
that’s the w-4 and if you didn’t see in the beginning make sure you put your
filing status in the description at the bottom if you have any questions put
them in the description at the bottom so we can put them on future videos you’ve
enjoyed this video be sure to subscribe you leave your comments down at the
bottom

Author Since: Mar 11, 2019

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