A W-4 is a tax form that an employee completes and returns to their employer to indicate how much tax to hold back (or withhold) from each paycheck. The official title of a W-4 is Employee’s Withholding Certificate, though you might recognize it as a federal withholding form. Employers use the W-4 to help determine payroll taxes and to withhold taxes for both the IRS and state (if income taxes are applicable) on behalf of their workers.
For most taxpayers, the key to filling out your W-4 is choosing the right withholding amount that’s about even with the taxes you actually owe or withholding slightly more of your paycheck so you can get a moderate tax refund. Of course, if you choose to withhold more than truly necessary, you’ll be living on slightly less during the tax year. You need to pay your income tax on earnings when you earn it, which is why it’s imperative to fill out your W-4 properly when you go through a life change that impacts your taxes—for example, getting a new job or getting married.
Key components of Form W-4
Although tax forms can look daunting, Form W-4 includes some straightforward components that you should already have available. These elements include your:
- Name and mailing address
- Social Security number (SSN)
- Filing status or marital status—single, married filing jointly, head of household, qualifying widower, or married filing separately
- Total earnings
You’ll also need to provide information such as any additional amount of money you want to be withheld from your paycheck or if you’re exempt from making tax payments.
Although you only need to fill out the first page of the W-4, there are other pages included with the form to help you determine your calculations:
- Instruction sheet: This sheet provides both general instructions regarding the form and specific instructions for each step.
- Multiple jobs worksheet: This applies if you have more than one job to calculate the total extra tax for all jobs.
- Deductions worksheet: This helps determine if you meet income requirements for claiming things like the child tax credit and credit for other dependents. This is also where you’d note additional income and any itemized deductions.
A W-4 is typically provided to you when you start new employment by the human resources team during your onboarding process. They should also be able to provide you with a new form if you need to make changes throughout your employment. Source