New tax forms could mean big penalties if not completed by end o - WECT TV6-WECT.com:News, weather & sports Wilmington, NC

New tax forms could mean big penalties if not completed by end of the year

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NC-4 EZ form NC-4 EZ form

NORTH CAROLINA (WECT) - 

  Time is running out for North Carolina residents who earn any kind of taxable income in the state to fill out updated forms that adjust how much is withheld from their paychecks to pay taxes.

"It affects all tax payers in the state of North Carolina as well as our retirees," Sherry Dunn with H&R Block said.

The deadline to fill out the NC-4 state withholding form or the NC-4 EZ version is December 31, 2013, and by this time, you should have already received this paperwork from your employer.

"It does not start until 2014 and that's why we're getting prepared and filling out new NC-4 withholding forms," Dunn said. "The state wants to make sure that you're not claiming too many dependents when you fill out the form, so you won't owe at the end of the year."

Here's why it's so important to complete these forms correctly and turn them back into your employer:

  • To make sure the appropriate amount is withheld from your state income
  • To avoid a large tax refund or big tax bill when filing 2014 returns in 2015

If you don't turn in the completed forms to your employer before the end of the year, you could be penalized. Dunn says employers have been instructed to complete the forms with the standard "single taxpayer with no allowances" criteria, meaning you could be subject to withholdings at the highest level possible.

The changes come from a new tax law passed this summer. It simplifies the income tax to a flat rate of 5.8 percent in 2014 and 5.75 percent in 2015. It also increases standard deductions, while steering away from some federal deductions. That means someone's state taxable income may be higher than their federal figure.

Personal exemptions have also been eliminated with the exception of a per-child tax credit that falls under households making less than $100,000.

Officials say the NC-4 EZ form should be suitable for most employees because most will need zero withholding allowances. This means you are saying "no" to itemized deductions for things like mortgage interest, charitable contributions and property taxes.

However, the longer version of NC-4 is for individuals with tax filings that are a little more complicated. That includes employees who will claim certain deductions or for households bringing in more than $50,000.

If you have questions about filling out the NC-4, officials have set up a toll-free number (1-877-252-4487) that is available through Feb. 28. 

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