Upon starting a new job, one form you will be required to file is the W-4, also known as the Employee’s Withholding Certificate. It’s one of the most important tax documents you will complete, as it informs your employer of the correct amount of federal taxes to withhold from your paycheck. Show
Learn about other key documents you’ll need to fill out for the 2022 tax season with our new video series. How to file a W-4 form in 5 StepsStep 1: Enter your personal informationThe first step is filling out your name, address and Social Security number. Make sure your name is as it appears on your Social Security card. The IRS states that if the name you enter on the form is different from the information found on your Social Security card, you will need to contact the Social Security Administration to ensure you receive credit for your earnings. For your tax filing status, check only one of the three boxes.
Step 2: Multiple jobs or spouse worksThe second step applies only if you have more than one job at the same time or are married filing jointly and you and your spouse both work. If one of these scenarios applies to you, then you have three options:
Step 3: Claim dependentsIf you have dependents, the IRS has a tool that can help you determine who you can claim as a dependent. You can only claim dependents if your income is under $200,000 or under $400,000 if you are married filing jointly. If you have children under 17 years of age, multiply the number of children you have by $2,000. If, for example, you have three children under 17, enter $6,000 in the first blank. If you have other qualified dependents, you can multiply the number of them by $500. Enter this amount in the second blank of the third section. Step 4: Factor in additional income and deductionsThe fourth step, which is optional, accounts for other adjustments you can make. This step has three parts.
Step 5: Sign and file with your employerOnce you’ve reviewed your form and verified that the data you provided is correct, simply sign and date it and return it to your employer. What to keep in mind when completing your Form W-4You can change information on your W-4 as needed. If you start a new job and you’re making the same pay, for example, you can check the box on 2C for both of these jobs. If your household finances change, and you become responsible for paying most of the bills, you can change your status to head of household which entitles you to higher standard deductions resulting in lower tax liability. What’s more, when you complete your W-4, it doesn’t go to the IRS but instead to your employer who will keep the form on file for at least four years. The IRS, however, reviews withholdings, so it’s important to complete your W-4 form correctly, or you could end up with a higher tax bill. Claiming exemptSome taxpayers might also qualify for exempt status. If, for example, you had no tax liability for the previous year, or for this year, you can claim exempt status on your W-4. Doing so indicates to your employer to refrain from withholding any of your pay for federal taxes. If you choose this option, you will have to fill out a W-4 form each year by Feb. 15 (or by the first business day after if the 15th falls on a weekend) to maintain your exempt status. FAQ about filling out Form W-4Here are some frequently asked questions about filling out Form W-4. What should you put on your W-4?The information you should put on your W-4 depends on how much you would like taken out of your every paycheck and put toward taxes. If you would like to avoid owing taxes at the end of the and potentially racking up a large tax bill, you should use the IRS’ Tax Withholding Estimator tool to determine how much you should have withheld from each paycheck. Make sure to complete the Multiple Jobs Worksheet if applicable. Consider submitting extra withholdings in line 4(c) or decreasing your number of dependents to ensure you are not greeted with a tax bill at the end of the year. Increasing your withholding will make it more likely that you end up with a refund come tax time. If you got a large refund last year, or are in a situation where you would rather receive all of your money now and pay your taxes at the end of the year, then consider using the W-4 form to reduce your tax burden. You can reduce the amount of taxes taken out of your paycheck by increasing your dependents, reducing the amount of “non-job” income or untaxed income that you are accounting for in your withholding in lines 4(a) or 4(c), or increasing the figure for itemized deductions in line 4(b). Do you claim 0 or 1 on your W-4?In previous years, W-4 forms included an option to have taxes automatically taken out of your paycheck or not. This was done by either not claiming an allowance and allowing the full amount of estimated taxes to be taken out of each paycheck by placing a 0 in the appropriate line, or by placing a 1 in the line and then choosing how much you would like withheld from each paycheck. As of 2021, this section of the W-4 is no longer relevant. The form has changed to use a more comprehensive formula for determining tax withholdings. A W-4 with the 0 or 1 question indicates that your employer is using an outdated W-4 form. However, you can still fill out this form if requested. A 0 will result in more taxes being withheld from each paycheck, while 1 will allow you to take home more money if you choose — though it may result in a tax bill at the end of the year if you withhold too much. What do you put on W-4 if no taxes are taken out?In order to qualify for exempt status, you will need to have no tax liability from the previous year and expect to have no tax liability for the current year. If you meet these qualifications, you can inform your employer not to withhold federal income tax from your paycheck by writing “EXEMPT” in line 4(c). Your employer will still withhold Social Security and Medicare taxes regardless of your exempt status. Also, your exemption will only last for one year. You will have to file a new W-4 claiming exempt status by Feb. 15 of a given year in order to maintain that status. How do you have more taxes taken out of your paycheck?In order to have more taxes taken out of your paycheck, indicate on the W-4 that you would like to have your employer withhold more money or update the form with new information that will result in more money being withheld. This can be done by indicating that you have fewer dependents than you did on a previous W-4 filing. You can also submit more withholdings in line 4(c), which will indicate to your employer that you would like them to withhold more than they currently are. How do you have less tax taken out of your paycheck?You can use the W-4 form to reduce your tax burden, as well. To do this, decrease the figure that affects your withholdings. That includes additional withholdings indicated in line 4(c), as well as non-job related income identified in form 4(a). You can also submit a new W-4 if you have a new dependent, which will reduce your withholdings. Do I claim 0 or 1 on my w4?By placing a “0” on line 5, you are indicating that you want the most amount of tax taken out of your pay each pay period. If you wish to claim 1 for yourself instead, then less tax is taken out of your pay each pay period. 2. You can choose to have no taxes taken out of your tax and claim Exemption (see Example 2).
How many withholding allowances should I claim?Claiming 1 allowance is typically a good idea if you are single and you only have one job. You should claim 1 allowance if you are married and filing jointly. If you are filing as the head of the household, then you would also claim 1 allowance. You will likely be getting a refund back come tax time.
What to put on withholding allowances?Add your combined income, adjustments, deductions, exemptions and credits to figure your federal withholding allowances. You can divide your total allowances whichever way you prefer, but you can't claim an allowance that your spouse claims too.
Should I put 1 or 2 allowances?You'll most likely get a tax refund if you claim no allowances or 1 allowance. If you want to get close to withholding your exact tax obligation, claim 2 allowances for yourself and an allowance for however many dependents you have (so claim 3 allowances if you have one dependent).
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