Anyone who has been employed in the United States has had to fill out a W-4 tax form.
This form is called the Employee’s Withholding Allowance Certificate, and it sets your withholding allowances. Although tax forms can be confusing, filling out a (W-4) is not overly complicated; in fact, most of the information it requests is quite basic.
The Purpose of a W-4
Employees complete W-4s to ensure that employers withhold the correct amount of taxes from their paychecks. You complete a W-4 when you are hired to set your withholdings.
The W-4 includes a section that collects your basic personal information, and it also has a section where you indicate the number of allowances you are claiming. You can also direct the IRS to add an additional amount to your withholdings if you wish.
If you’re exempt from withholdings, you can indicate this on the W-4. The money withheld from your pay goes to the Internal Revenue Service identified with your name and Social Security number. These withholdings accrue throughout the tax year, counting toward your annual income tax bill.
Completing the W-4 Form
Filling out the W-4 form is straightforward:
- Enter your name and current address in section one of the form.
- Enter your Social Security number in box two. Your Social Security number connects your withholdings to your tax record when your employer sends them to the IRS.
- Indicate your marital status in box three. You can choose single, married, or “married, but withhold at higher single rate.” Choosing the latter might apply to you if your spouse is also employed and you think you might not have enough taxes withheld from your pay. Review the “Two-Earners/Multiple Jobs” worksheet that accompanies the W-4 if you need more help choosing the right marital status designation for you.
- If you’ve recently changed your name, indicate the name change in box four. Make sure you’ve updated your Social Security card to reflect your new name, too.
- Enter the total number of claimed allowances on line five. Page three of the W-4 instructions provides a “Personal Allowances” worksheet that you can use to figure this number out if you wish. Every claimed allowance reduces your withholdings; however, you can’t select a higher number of allowances than the worksheet shows.
- For the worksheet, enter one allowance on line A only if no one else claims you as a dependent.
- Enter one allowance on line B if you’re married and filing jointly.
- Enter one allowance on line C if you’re filing taxes as the head of your household. According to IRS definitions, a head of household is an unmarried adult who pays more than 50 percent of the costs of home upkeep for yourself and your dependents.
- If you’re single or married filing separately and you have one job; if you have one job, are married to an unemployed spouse, and filing jointly; or if you have wages from your and/or your spouse’s second job that total less than $1,500, enter one allowance on line D.
- Use line E to enter allowances for dependent children.
- Enter allowances for any other dependents you claim on your tax return on line F according to the instructions.
- If you have other credits, enter additional allowances on line G.
- Add up the numbers on lines A through G and place the total on line H.
- If you have other tax situations that require itemized deductions, continue with the worksheet.
- Enter any additional amount you want withheld from your paycheck on line six.
- Claim legal exemption from withholding on line seven, if applicable. Write the word “exempt” in the space if you qualify.
- Attest to the accuracy of the information you’ve entered on the W-4 by signing your name and dating the form.
- Give the completed W-4 to your employer.
Filling Out a New W-4
You may need to change your withholdings and submit a new W-4 to your employer in a few different situations.
If you get married or divorced, add a dependent to your family, or get an additional job, recalculate your withholdings and submit a new W-4.
Starting a new job in the middle of the year after having been unemployed previously can give you a special withholding circumstance as well. Being employed for 245 days or less in a calendar year enables you to have your employer use a “part-year” method to compute withholdings, which should reduce your withholdings.
If you review your payroll statements and realize that your withholdings are incorrect, you can also amend them and submit a new form. Any changes made should take effect within one to three pay periods.
Completing the W-4 correctly is important because it ensures that you don’t have too much or too little withheld for taxes.
If you owed a lot in taxes last year, consider increasing your withholdings on your W-4 for the current year; this should help you reduce your tax bill. If you got a large refund last year, consider reducing your withholdings for the current year; this will give you more in your paychecks.
- Form W-4
- W-4 Guide
- W-4 Basics
- Withholding Calculator Frequently Asked Questions
- IRS Issues Draft Form W-4 Overhaul
- Lesson: “W” Is for Wages, W-4, and W-2
- Be Prepared for Your First Day of Work
- Income Tax Paycheck Withholding Basics
- How Do I Fill Out My W-4?
- Snagged a New Job? How to Complete a W-4 Form
- The One Thing to Do After Filing Your Taxes
- How to Explain Paycheck Withholdings, Deductions, and Contributions
- W-4: How to Fill it Out and What You Need to Know
- How Many Allowances to Claim on Form W-4
- Tips for Calculating Allowances and Preparing Form W-4
- Figuring Out Your Form W-4: How Many Allowances Should You Claim?
- How to Fill Out a W-4: Definitive Guide
- Payroll Forms and Functions
- How to Complete a W-4 Form Correctly
- IRS Form W-4: How Many Allowances Should I Claim?
- Update Your W-4 to Save Yourself From a Tax Bill