how to fill out a w4 for dummies

Complete line 2 if there are 3 jobs to consider between you and your spouse. This would mean one of you is working 2 jobs at the same time. If you’d like to know how to fill out your W-4 form to get more money, you’ll want to pay close attention to Steps 3 and 4. At The Ultimate Guide To Bookkeeping for Independent Contractors that point, the money may feel like a windfall, and you might use it less wisely than you would have if it had come in gradually with each paycheck. For example, let’s assume Spouse A has two jobs making $50,000 and $15,000, while Spouse B has a job making $40,000.

how to fill out a w4 for dummies

When you are hired for a new job, you will be required to complete a W-4 form to let your employer know how much tax to withhold. Prior to starting employment, you can fill out a PDF version of the W-4 form online and print it out. What you calculate in section 2 is actually not entered in section 2.

What Is a W-2 Form? How the Wage and Tax Statement Works

IRS has now updated its income tax withholding tables in the new WW4 form. There are now two tables; Wage bracket method tables in case the employers have a manual payroll system and Percentage method tables in case of an automated payroll system. The W-4 form is an Employee’s Withholding Allowance Certificate designed to let your employer know how much of your income to withhold for federal taxes. You should fill out a new W-4 when you have started a new job, if your personal situation changes or if you want to adjust the amount withheld.

And if you haven’t filed a new W-4 since 2020, you may want to file out a new one—and make sure you are withholding the right amount for taxes. You may have already calculated this number when you completed Step 2 above. If you are exempt from filing taxes, write “exempt” here, as mentioned above. This is applicable in case the employees have any dependents. In that case, they can claim Child Tax Credit and even credit for other dependents. Usually, single employees can claim a credit of up to $200,000, while married taxpayers who are filing a joint return can claim a credit of up to $400,000.


As just noted, the form tells your employer how much federal income tax to withhold from your paycheck. You’ll need to complete a new W-4 every time you start a new job. If your new company forgets to give you one for some reason, be sure to ask. If your employer doesn’t have a W-4 form from you, the IRS requires it to treat you as a single tax filer, which means withholding the highest possible amount from your paycheck for taxes.

If you have multiple jobs, or if you are married filing jointly and you and your spouse each have a job, you’ll also complete Step 3 on the W-4 form for the highest-paying job. You definitely don’t want to file exempt if you’re not actually exempt, though. You won’t have any federal income tax withheld from your paycheck, so when you do your taxes in April, you’ll have a giant tax bill that includes late payment penalties. The IRS releases updated versions of certain tax forms each year to tweak language for clarity and to update references to certain figures, such as tax credits, that may be adjusted for inflation. The 2023 version of the W-4 form, which the IRS released in late 2022, can be used by employees to adjust their withholding on their 2023 paychecks.

Step 1: Provide Your Information

A dependent usually refers to a qualifying relative or a qualifying child who lives with the employee and is financially dependent. Filling out a W-4 is an important step in setting up your new job. It allows your employer to withhold the correct amount of federal income tax from your paychecks. Your employer will use this information to withhold the correct amount of federal income tax from your paychecks. Add the number of dependents you can claim on your tax return. To qualify, your income must be less than $200,000 (or $400,000 if married filing jointly).

  • For each qualifying child, you can enter the credit amount which you can find in the instructions provided with the W-4 form.
  • If only one spouse is working, check the married box and claim 2 allowances for you and your spouse together, plus 4 more for every child under the age of 17.
  • This would mean one of you is working 2 jobs at the same time.
  • The newest W4 form no longer has this question about withholding allowances where you need to determine a set number.
  • It tells your employer how much to withhold from your paycheck.
  • Tax withholding is an umbrella term used to describe the various taxes that are taken out of an employee’s paycheck.

It is important to fill this form as a part of joining formalities because this determines how much tax the employer would withhold from the employee’s paycheque. Additionally, if you have any dependents or deductions, such as student loan interest, you should consider claiming more allowances, as these can lead to further reductions in your tax liability. Be sure to consult with a tax professional, as they can help you determine the number of allowances that are right for your particular situation. Claiming 0 allowances means more tax will be withheld in each paycheck, which can reduce the chance of owing a large amount of taxes when filing.

Can I adjust my W-4 multiple times throughout the year?

Remember to add up your retirement income distributions as well as your interest and dividends, cryptocurrency, rental income, and other investments. Many taxpayers forget the side gig and other small-business income when completing their W-4, which often results in taxes owed. This is also where you choose your filing status, such as Single, Head of Household, or Married, Filing Jointly. Form W-4 takes you through 5 quick steps that gather the information needed to estimate more accurate withholding. Don’t make the big mistake of dismissing the W-4 form as just “new-job paperwork.” Based on annual life and tax changes you should review  your Form W-4 each year and update when necessary.

  • Or you could set the rate now and just make an estimated tax payment to cover the difference.
  • The Internal Revenue Service redesigned it in 2020 in a way that’s intended to make things easier and more accurate.
  • The form was redesigned for 2020, which is why it looks different if you’ve filled one out before then.
  • You can also use the IRS Tax Withholding Estimator, which is available at /W4app.
  • Check out our post on summer jobs and withholding, which covers some of these concepts.

In order to file exempt on your W4, you’ll need to meet certain requirements. You can file exempt if you expect to have no tax liability during the year. This might happen if you didn’t make enough income to actually owe income tax the previous year, and you expect the same to occur the following year as well. The information found in step 2 of the W4 form helps you know how to calculate the right amount of withholdings for your household if you have a multi-income household. A W-2 is the IRS tax form you receive from your employer at the end of the tax year. It includes information on how much money you earned, how much money was withheld for federal and state taxes and other contributions made to Social Security and your employer-sponsored 401(k) account.


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