The federal law requires every taxpayer to withhold tax so they can pay their federal income tax. As an employee, your employer will do this for you and forward a portion of your income to the IRS. To let your employer know how much tax should be withheld from your pay, you must use Form W-4 2023.
The IRS annually renews this form so if you’re going to fill out a new one, it is best to keep up with the changes. Over the years, Form W-4 has stayed pretty much the same but this year, the biggest change occurred.
You would claim allowances to set your tax withholding in previously issued Forms W-4. In general, the more you claimed, the less tax would be withheld and vice versa. The changes on W-4 this year removed them entirely.
New Form W-4 Explained
Now, you need to enter your information about your anticipated tax return. This includes your filing status, deduction and credit amounts along with income earned outside of jobs you want to withhold tax for and multiple jobs or spouse works.
So there is nothing to mention about the allowances. The IRS explains the changes as it is to increase the accuracy, simplicity, and transparency of the form.
Whether you agree with this or not which is quite understandable but once you take a glimpse into the changed W-4, you will see that it is actually much better than the previous ones. At least that is our thought as far as the accuracy is concerned.
You can think of the Form W-4 changes 2023 as a replacement. The worksheet in which you would use to determine how many allowances you should claim is now the tax withholding form itself. Therefore, the changes occurred on Form W-4 aren’t exactly “changes”.
You will still use the same information to determine tax withholdings but instead of claiming any allowances in return of that, you simply will enter the anticipated tax information and get it over with. This change, of course, increases the simplicity of W-4 to a higher degree. Overall, these are the changes in Form W-4 this year. To get the Form W-4 and see its content, read the following article.