Poll: 45 Percent Cannot Remember Last Time They Adjusted Tax Withholding

By:
Chris Gaetano
Published Date:
Dec 8, 2020
A recent Harris Poll conducted on behalf of the AICPA has found that nearly half of American taxpayers, 45 percent, cannot remember the last time they adjusted their tax withholding, reported CPA Practice Advisor. This is despite a number of tax changes over the last few years, as well as newly designed forms, such as the new Form W-4, which no longer includes allowances and makes it easier to coordinate across multiple jobs and with a spouse. Failure to adjust withholding can lead to surprises come tax day; for instance, CPA Practice Advisor noted that many Americans were confused in 2017 and 2018 when they got smaller tax refunds than before, or even had to pay, because of rate changes in the Tax Cuts and Jobs Act (TCJA).

Yet it is unknown whether, even if people were aware of these changes, they'd change their withholding. Fewer than half of Americans, 44 percent, said it was their goal to pay as close to the exact amount of taxes as possible, compared to 56 percent who are purposefully paying inaccurate amounts throughout the year. Of those paying inaccurate amounts, 71 percent pay too much in order to get a refund, and 29 percent pay too little, not minding a tax bill come the spring. Meanwhile, the poll found that 26 percent updated their withholding since the IRS released the new W-4, only 16 percent made changes after the TCJA, and only 14 percent did so before either of these changes.

Want to learn more about changes you can advise your client to make? The Foundation for Accounting Education will be hosting Surgent's Advanced Individual Income Tax Return Issues Webcast  on Dec. 10 and the Best Individual Income Tax Update Course by Surgent Webcast on Dec. 11.

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