Tax forms can be difficult to fill out even when they come with their own set of instructions.  Form W-4 is no exception.  All employees must complete the two-page form so that employers know how much federal income tax to withhold from your paycheck.  What is withholding?  It involves a portion of your earnings taken from your paycheck and sent to the government.  You are required to submit Form W-4 when you are first hired by a company.  You can also turn in a new form to your employer once a year if you need to update your filing status.

What happens if you forget to turn in Form W-4 to your employer?  The IRS will treat your income as if it were taking taxes from a single person with zero withholding allowances.  This is the highest withholding rate possible but could be a problem if you need more take home pay to cover expenses.  Here is a link to Form W-4 from the IRS website so you can look it over https:/www/

Filling Out Form W-4

  1. Read each statement listed on lines A through G and enter a specified number as your answer; you can leave statements blank if they do not apply to you or you are only claiming yourself
  2. Add up A through G to calculate total number of allowances and enter in Line H
  3. Enter the number from Line H of worksheet in Line 5 of Form W-4
  4. Fill out actions 1 through 4 on Form W-4 these include name, Social Security Number and filing status
  5. Complete Deductions and Adjustments Worksheet only if you plan to itemize tax deductions or claim credits on your return
  6. Enter total amount calculated in Line 10 on Line 5 of Form W-4
  7. Decide if you want additional amount withheld from paycheck and enter in Line 6
  8. Write “EXEMPT” on Line 7 ONLY if meet the conditions for exemption
  9. Sign and date Form W-4

Keep in mind the following when filling out or updating your W-4:

  • Employers will withhold less money towards your taxes if you claim more allowances on your paycheck.
  • A lump sum amount will have to be paid back to the IRS if too little is withheld.
  • If you voluntarily raise the amount withheld you can avoid payments at the end of the year.
  • Consider updating form if marital status changes, give birth or adopt, change or lose job and if you get a raise.
  • You can claim an exemption from withholding if you had no tax liability in previous year.  You expect a refund of all income tax withheld because you expect to have no tax liability.