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Stretch Your Dollar: What you need to know about the new W-4

Stretch Your Dollar

(WTNH) — President Trump is considering a delay in the April 15th tax filing deadline. It’s all aimed at curbing the financial impact of coronavirus on households and businesses.

Meanwhile, we’re also learning about an overhaul in tax forms. Mary Moloney has what you need to know about the new W-4 in today’s consumer watch.

For the first time in years, the IRS updated the federal income withholding form, or W-4. The change reflects the new tax code congress approved in 2017. The new form has been divided into five steps — and you can skip questions that don’t apply to your situation.

One major change is that it took away allowances because the new tax law eliminated personal exemptions. Instead, the form directly asks you how many children and dependents you have and you have to multiply that number by the amount of the federal tax credit.

It also simplified the section about other income. Now you just have to check a box if you work two jobs or if you have a spouse who works. You only need to fill out a W-4 if you started a new job in 20-20.

But tax specialists encourage workers to review their withholdings each year. If too little is deducted, you may get a smaller refund, or possibly owe money at tax time.

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