In case you haven’t heard, the IRS made a big change to Form W-4 for 2020, and it’s going to hit production crew workers harder than most.
As a refresher, the W-4 is the form you, as a film crew member, give your employer (production) to tell them the rate at which you want federal income taxes withheld from your paycheck. Easy, right? Well…
The old W-4 had a section that required the production crew employee to enter an “allowance” number from 0 to 9, or the word “EXEMPT.” That number, combined with your category (Single, Married, or Married but withhold at higher Single rate) determined the federal tax withholding rate.
When you would file taxes in April, you’d then find out if you had too much or too little withheld… or somehow pretty much Goldilocksed it.
What changed on the 2020 W-4 for production crew workers
The now-released W-4 for 2020 serves the same purpose as the older versions, but gets to the calculation in a very different way. The biggest change for short-term film crew workers is that there is no longer a place to enter a single-digit allowance number.
Due to the increased standard deductions defined by the 2017 Federal Tax Cuts and Jobs Act, the new form does away with the allowance number altogether, and the categories are updated:
- Single or Married filing separately
- Married filing jointly
- Head of household
The rest of the form is optional (except the signature at the end – that’s required), and includes worksheets for adjusting your withholding based on dependents, your spouse’s job(s) and any concurrent other jobs (production crew or otherwise) you may have.
What does it all mean for production crew?
Production crew members and other short-term employees, freelancers, and W-2 gig workers may have a tougher time filling out the W-4 than your average fulltime nine-to-fiver. This is due to the short-term nature of most crew jobs for film and TV production.
When the new W-4 asks about multiple jobs in a year, freelance production folk will be disappointed to find there is no “Duh” response option. It may be helpful to consult with a tax professional to determine the best way to fill out the W-4 for your own particular situation.
Here’s why the IRS cares about how many crew jobs you have
The new tables and worksheets were not just designed to drive production crew workers nuts; they actually serve a purpose. To understand what it is, we need a little context.
To owe or not to owe
As much as crew members may look forward to getting a big tax refund at the end of the year, the government likes it even more than you do. Why? Because it means you gave them an interest-free loan for the year, which they don’t have to pay back until April. Pretty good deal!
On the other hand, if you have too little income tax withheld over the course of the year on your film crew gigs – and end up owing money at tax time – that means the opposite is true: the government gave you an interest-free loan over the course of the tax year! That’s not their favorite.
And for some taxpayers, owing taxes in April comes as a surprise… an unpleasant one, even. To make matters worse for the IRS, not everyone is willing or able to pay up when it comes time to collect. That means shortfalls.
Balancing it out for film crew workers
If, when you fill out your 2020 W-4, there’s no way to indicate that you have other concurrent income or possibly a sizable additional household salary from a spouse, withholding will be at a lower tax rate/bracket than actually applies to your situation… so you’ll end up being undertaxed, and owe big in April.
As we saw above, the government doesn’t like you to owe. So they worked out a way to learn about your other household income on the W-4, so there are fewer surprises for everyone on Tax Day. Make sense?
Note: The new sections of the new W-4 having to do with dependents and other expected deductions (such as mortgage interest, etc.) are designed to decrease your taxes withheld on each paycheck. It’s all about trying to hit the true rate as closely as possible.
Do some figuring of crew jobs in advance
There may be some trial and error for film crew freelancers. Just keep in mind that, as seen above, the IRS isn’t trying to punish you for having 50 production jobs over the course of 52 weeks. They’re just trying to get your ballpark annual income, so the best withholding estimates can be applied.
It’s also worth noting that film crew employees can just turn in a new W-4 anytime you want during a long-term crew assignment, to fine-tune your withholdings for the next check.
We recommend looking at the worksheets in advance, so you’ll be ready for that first W-4 in January. (By the way, if you have an ongoing production job you’re already on, and an old-timey W-4 on file, there is no requirement to submit a new one.)
You can also try some tax calculations in advance, to see where you land. The IRS offers an estimator here… use that in conjunction with some sound tax advice from a CPA, and you’ll be ready for the dawn of the new decade. At least as far as the W-4’s concerned.
Need crew payroll services for your production? See how Media Services can help with your entertainment payroll.