It’s important to understand the W-4 form because it affects how your employer pays your taxes to the IRS. The employer will pay your federal taxes by taking an allotted amount out of every paycheck. Filling out the form is pretty straightforward, but this article will give you a step by step guide on how to complete the form correctly.
What is the W-4 Form?
The W-4 form is the Employee’s Withholding Certificate. It tells your employer how much money to withhold from your paycheck for federal income taxes. Your employer pays the government on your behalf. The W-4 form gives you some control over your taxes and how much of your pay you get to take home.
When to Change Your W-4 Form
Typically, you fill out this form when you start a new job. However, you can submit a new W-4 at any time during the course of your employment if you want to change anything there.
The IRS suggests updating your W-4 when you have these life change events:
• New Children
• Second Job
You should also change your form if you realize now that you filled it out incorrectly. Depending on how many allowances you claim, you can help prevent tax liability come tax season. Also, if you just want to change it for personal reasons, you can change it at any time; just talk to your employer.
Where to Find the W-4 Form
When you begin a new job, your new employer should give you a W-4 form to fill out. To access the W-4 form, go to the IRS’s W-4 Form page. There is a PDF form of the W-4 that you can download and print out.
You can type in your tax information directly into the file if you wish, or you can print it out and write it in. It’s a good idea to save a copy of it so that you know how you completed it.
How to Complete the W-4 Form
You should take care in filling out this form because it directs your employer on how much federal income tax to withhold from your paycheck. If too little is withheld, you may have tax liability when you complete your annual taxes. If too much is withheld, generally, you will get a tax refund, but your paycheck will be less each payday.
Step 1: Enter Personal Information
This part is pretty easy. Just complete it with your legal name, current address, and social security number. When selecting part “c,” you need to check which filing status you expect to file when you file your income tax returns. For example, if you expect to be filing married filing separately, select the first box that says, “Single or Married filing separately.”
Step 2: Multiple Jobs or Spouse Works
This section is for unmarried taxpayers with more than one job or for those who are married and have a spouse that works as well. For those who are married with a working spouse, only follow this step if you plan to file a joint married tax return.
If you have multiple jobs or a spouse that works, complete Step 2(b), the Multiple Jobs Worksheet found on page 3 of the W-4 form. The instructions are pretty clear-cut, but if you have any questions, your new employer should be able to assist you. The tables on page 4 can be of great assistance when filling out the Multiple Jobs Worksheet.
The IRS recommends only completing the Multiple Jobs Worksheet for one job, the highest paying one. If your wages from more than one job total over $120,000 or if there are more than two jobs, Publication 505 has the additional tables you will need. Here is the IRS’s web address for Publication 505 for the 2019 tax year:
Step 3: Claim Dependents
The number of dependents you claim in step 3 will determine the amount of the child tax credit that you may be able to claim when filing your annual tax return. On page two of the W-4 form, the IRS offers “Specific Instructions” for filling out step 3.
For additional eligibility requirements for the child tax credit, the IRS recommends reviewing Publication 972. Here is the IRS’s web address for Publication 972 for the 2019 tax year:
Step 4: Other Adjustments
Step 4 is optional; this step allows you the opportunity to deduct more from your paycheck if you deem necessary. In part a, you will enter any other estimated income you will have for the year; in part b you will enter the total amount from the tax deductions worksheet online (line 5). Part c gives you the chance to withhold any additional tax you want to from each paycheck, including the amounts from the multiple jobs worksheet (line 4).
If you enter an amount in part c, you will reduce your paycheck. The upside is that you will be increasing your tax refund or decreasing your tax liability come tax season. It’s kind of like a piggy bank that you get to open when you file your annual taxes.
Step 5: Sign Here
Before signing and dating the W-4 form, be sure to double-check your answers to all questions. Make sure it’s legible as the human resource department of your new employer probably looks at hundreds of these, and the last thing you want is for them to key something in incorrectly.
Be sure to review your first paycheck, because your withholding allowances should go into effect. If you find any discrepancies between what you wrote down on your W-4 and what is taken out of your paycheck, be sure to talk to the human resource department at your new employer’s office to rectify the situation. You don’t want any mistakes on this form or else you will have an unpleasant surprise come tax season.