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IRS to unveil a simpler W-4 form next month

The new W-4 - the document taxpayers fill out to tell their employer how much to withhold from their salary - comes as many people are steaming over their tax refunds, or worse, having to pay.

This photo shows an IRS W-4 form on

This photo shows an IRS W-4 form on Feb. 1, 2018 in New York.  Photo Credit: AP / Barbara Woike

The tax headaches continue.

The Internal Revenue Service is planning to introduce a new W-4 form, but its first attempt at revising it failed, so much so that officials say they are going back to the drawing board.

"We realized it's not going to work," said IRS spokesman Eric Smith. "We're going to take another run at this."

Smith said the new draft coming out next month will be more simple. Without offering many details, he said taxpayers will still be able to fill it out in a way that provides them a refund.

The new W-4 — the document taxpayers fill out to tell their employer how much to withhold from their salary — comes as many people are steaming over receiving lower-than-expected tax refunds, or worse, having to write a big check to Uncle Sam.

The draft of the new W-4, released last May, has been vilified by taxpayers as too complicated, lengthy and invasive into their private information, such as asking for other sources of income.

"That confusing, ridiculous W-4 form," said Melville accountant Martin Cantor. "I think it will make anyone go for aspirin."

IRS officials, seeing the harsh reaction, said they are scrapping that draft and will publish another by the end of May. 

The final version — the W-4 people will use in 2020 — will come out before the end of the year, Smith said.

The W-4 needed revising because the new tax law that went into effect last year, the Tax Cuts and Jobs Act, eliminates personal exemptions up to the year 2025, Smith said. A personal exemption was a specific amount of money that you could deduct for yourself and for each of your dependents. 

The redesign of the W-4 released last year asked taxpayers to fill in their itemized deductions, tax credits and outside income, among other things. The aim was to make the form a more accurate tool for determining the amount of tax that should be withheld, Smith said.

"It was not super user-friendly," said Andy Phillips, director of federal agency relations at H&R Block's Tax Institute. "It was like filling out another tax return."

Beyond that, the form asked for information that workers may not want to share with their employer, such as income from other jobs, he said.

Phillips said he hopes the new W-4 offers people a default option for filling it out that is as simple as the current form. But if taxpayers want to add more details, they should have that option, he said.

"The form should be as user-friendly as possible, while protecting people's privacy," he said.

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