This form is crucial in determining your balance due or refund each tax season. For instance, if you withhold too much, you can end up with a large refund. If you withhold too little, you can create a balance due and potentially an underpayment penalty. Check out our step-by-step process below, which will walk you through how to fill out a W-4 form for a job. Ready to dive into how to fill out your W-4? You can choose from single, married filing separately, married filing jointly, qualifying widow er , or head of household.
While you can stop here and allow your employer to simply withhold at default levels, the easiest path may not be the best. To get the right balance between paycheck and your refund, you might need to complete one or more additional steps — especially if you want to avoid surprises when you file. Otherwise, you may set up your withholding at too low a rate. Checking the box for the default method may seem like the easiest choice.
But, this will sometimes result in a refund check and much smaller paychecks throughout the year. If you are in a good enough financial situation, this may not seem like a big deal. You want to make sure only one of you allows for child-related tax credits through withholding. If you and your spouse each allow for child-related tax credits on your W-4, it will likely result in not enough withholding, and having to pay an additional amount to the IRS at end of the year.
Step 3 of the new W-4 form will ask you how many qualifying children you have under age 17, and how many other dependents you have. After you complete Step 3, your employer will know exactly how much to decrease withholding to allow for your children.
This is also where you can reflect any other tax credits as well if you want the amount withheld from your paycheck. See the W-4 Form instructions for details. If you expect to itemize deductions instead of claiming the standard deduction, you can also use a deductions worksheet attached to the W-4 form to ask your employer to decrease withholding by a specific amount each pay period. If you need to claim an exemption from withholding, you can still do that on the new W-4 form. Here's what the form is used for, how to fill it out and how it can make your tax life better.
A W-4 form, formally titled "Employee's Withholding Certificate," is an IRS form employees use to tell employers how much tax to withhold from each paycheck. Employers use the W-4 to calculate certain payroll taxes and remit the taxes to the IRS and the state on behalf of employees. You do not have to fill out the new W-4 form if you already have one on file with your employer.
You also don't have to fill out a new W-4 every year. If you start a new job or want to adjust your withholdings at your existing job, though, you'll likely need to fill out the new W Either way, it's a great excuse to review your withholdings. In the past, employees could claim allowances on their W-4 to lower the amount of federal income tax withheld from their wages. The more withholding allowances an employee claimed, the less their employer would withhold from their paychecks.
However, the Tax Cuts and Jobs Act overhauled a lot of tax rules, including doing away with personal exemptions. That prompted the IRS to change the W-4 form. The new W-4, introduced in , still asks for basic personal information but no longer asks for a number of allowances. Now, employees who want to lower their tax withholding must claim dependents or use a deductions worksheet.
Form W-4 is available on the IRS website. Here's how to complete the steps that apply to your situation. Enter your name, address, Social Security number and tax-filing status. If you have more than one job, or you file jointly and your spouse works, follow the instructions below to get more accurate withholding. You typically have to have a W-4 on file for each job. Leave those steps blank on the W-4s for the other jobs. The trick: Both spouses need to do that on each of their W-4s.
On line 4 c , you can instruct your employer to withhold an extra amount of tax from your paycheck. Instead of having the tax come directly out of your paycheck, send estimated quarterly tax payments to the IRS yourself instead. See the rules about the child tax credit and for when you can claim a tax dependent.
If you want extra tax withheld or expect to claim deductions other than the standard deduction when you do your taxes, you can note that. Once completed, give the form to your employer's human resources or payroll team. Consider using Form W-4 to reduce your withholding. And here are some steps you might take toward a specific outcome:. If you want more taxes taken out of your paychecks, perhaps leading to a tax refund when you file your annual return, here's how you might adjust your W Add an extra amount to withhold on line 4 c.
If you want less in taxes taken out of your paychecks, perhaps leading to having to pay a tax bill when you file your annual return, here's how you might adjust your W Reduce the number on line 4 a or 4 c.
You indicate the correct tax-filing status. The simpler new design features straightforward questions to ensure accuracy. Factors like the birth of a child, starting a new job, or marriage affect the number of allowances you can claim. Allowances are related to your tax brackets and standard deductions. Remember that you need to find a balance and have the right number of allowances as claiming too many allowances means you give the IRS some money when the tax year is over.
Taking a few allowances allows you to get your money back as a tax return. Claiming 0 when you are married gives the impression that the person with the income is the only earner in the family.
You can opt to claim 0 but have an extra amount withheld. All these options are available on the W-4 form. If you are married with two kids, you should claim three or more allowances as they fall under W-4 exemptions.
If you are single and have one job, you can claim 1 allowance. That allows you to get close to your break-even amount. However, you need to be cautious as this could result in some tax due. If you have more than one job and are single, you can claim 2 at the first job and 0 at the second job. Alternatively, you can split your allowances, which means claim one at the first job and another at the second job.
You can claim 2 allowances if you are single with one child. That is if you are single and have one dependent who is your child. As a single parent with two kids, you can claim more than 2 allowances if you only have one job. You can request an allowance for each child if you have more than two when you are single. That withholds most taxes from your pay, which could result in a refund.
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