Form W-4 is an easy to complete. The document, also known as the Employee’s Withholding Certificate, is distributed to new employees during the onboarding process. This form collects the data necessary to understand how much an employer should withhold in federal income taxes. Accurately completing a W-4 ensures that an employee does not dramatically underpay throughout the year, which could result in a penalty.
Form W-4 itself is straightforward. It requires employees to identify how they file taxes (as single or married), whether they have any dependents, and if there are any adjustments to be made. The IRS also includes a Multiple Jobs Worksheet and Deductions Worksheet to help employees understand their deductions.
From the employer’s perspective, however, the document is slightly more complicated. All employers must retain employee W-4 forms for an extended period of time. They will either need to keep paper records for all employees or host a centralized database. Digitally storing W-4 forms is the simpler option, but even this will require the right accounting software tools. Plus, employers may need to transfer data from a W-4 to other tax documents, which means an integrated accounting solution is necessary.
The software tools from Advanced Micro Solutions can do all of this and more. No matter your exact accounting needs, especially as they pertain to the W-4 form, we can help.
Updates to Form W-4
The W-4 doesn’t typically receive a lot of updates, but in early 2020, a small detailed changed. The IRS revised the form to change the medical expense deduction floor from 10 percent to 7.5 percent. This small change won’t likely affect your filing, but it is important to note going forward. The IRS also recently revised its general FAQs on the form, which may provide more document-specific answers.
AMS Products for W-4 Support
If you’re looking for a simple Form W-4 solution, our Forms Filer Plus ($49) module is a great place to start. Employers can prepare payroll related forms within the software, entering data onto a digital facsimile of the document. This is a good option for employers who want to prepare certain forms without setting up an employer and employee in a payroll software.
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If you need more robust accounting support, we recommend AMS Payroll ($129), our semi-automated payroll system. The software integrates with the Forms Filer Plus, allowing users to access completed forms for essential payroll calculations. That said, AMS Payroll is more than a W-4 calculator. This tool supports up to 1,999 payers and up to 9,999 employees per payer. The easy setup will save you time, and the back-end data feature ensures that your employee’s data – especially data collected on a W-4 – is kept securely. This tool automatically calculates a range of local, state, and federal taxes, saving you both time and a headache.
While AMS Payroll does not directly support Form W-4, the Forms Filer Plus module does. By combining these tools, users can complete and file the form directly from software, then utilize the data in essential payroll calculations and transactions. Both of these products support a variety of state and federal forms, so you’ll have coverage no matter your needs.