Wage Withholdings and the W-4 Options for 2021
The first step in helping your clients better understand wage withholdings is resolving whether payments for services are being made to a contractor or employee (See “Understanding Employee vs. Contractor Designation,” FS-2017-09, July 20, 2017). The salary withholdings roadmap begins with the 2020 IRS Form W-4, “Employee’s Withholding Certificate,” and instructions found in IRS Publication 15-T “Federal Income Tax Withholding Methods.” (See generally “Topic No. 753 Form W-4 – Employee’s Withholding Certificate,” IRS.gov, https://www.irs.gov/taxtopics/tc753).