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Instead of asking for a number of allowances, the form has added lines for the optional reporting of non-wage income that isn’t subject to withholding, expected bonuses, itemized deductions and expected credits, and the wages of other members of the taxpayer’s household.
Groups like the American Institute of CPAs and the National Association of Enrolled Agents have pointed out that not all employees will be comfortable sharing some of this information with their employers.
Shorter … or not
The proposed W-4 is only two pages – half the length of the current four-page version. Some of those four pages, however, are the instructions for the current form, while the proposed form has a separate set of instructions that comes in at a whopping 11 pages.
Between the extra information and the extra calculations suggested in the instructions and other IRS guidance, the result will be something like what industry experts have described as a “mini-1040” that will allow taxpayers to much more accurately determine the appropriate withholding.
No change at all, unless you want it
The IRS and Treasury have made it clear that taxpayers and their employers can continue to use the current W-4, and have said that their goal is to make the system “backwards-compatible,” so that taxpayers who are satisfied with their current withholding don’t have to file a new one.