W-4 Form What It Is & How to Fill It Out Millennial Money

The IRS recently updated the form, so even if you’ve filled it out in the past, you may need an overview of how to complete it. You can change your withholding at any time by submitting a new W-4 to your employer. 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.

Employers need current W-4s to withhold the correct amount of federal income taxes for employees. If an employee does not complete and sign a W-4, the IRS requires the employer to withhold taxes at the highest withholding rate possible. You no longer need to claim allowances on your W-4 form, but there is a section for claiming dependents in Step 3. This section allows you to list all of your dependents, making sure the appropriate Child Tax Credit amount is deducted from your withholding. Fill out this section if you are the sole earner, or if you are married filing jointly and have the highest-paying job. If you are single with multiple jobs, you would also only need to fill out this section for your highest-paying job.

How to fill out a W-4 form

The new Form W-4 provides taxpayers with different sections to fill out depending on your tax situation (see the image below). When filling out the form, you only need to complete the steps that apply to you. After filing your tax return, a smart financial move is to double-check your Form W-4. Ensuring you have the right amount of tax withheld from your paycheck can make a big difference in your tax outcome next year. To change their tax withholding, employees can use the results from the Tax Withholding Estimator to determine if they should complete a new Form W-4 and submit to their employer.

While there’s not much you can do about it now except hunker down and get that bad boy paid off (you have options), you can avoid it next year. You can also reflect any other credits you’re planning to claim on this step too. Once 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. The offers that appear on this site are from companies that compensate us. But this compensation does not influence the information we publish, or the reviews that you see on this site.

Step 3: Claim Dependent and Other Credits

If it doesn’t seem like it’ll be enough to cover your whole tax bill, or if it seems like it’ll end up being way too much, you can submit another W-4 and adjust.

Set your business up for success with our free small business tax calculator. From bookkeeping to tax consultations and filings, the Pros can help. The revenue these partnerships generate gives us the opportunity how to fill out a w4 for dummies to pay our great team of writers for their work, as well as continue to improve the website and its content. Line 5 of the worksheet will show $22,200, which will also be entered on Page 1, Line 4(b).

How To Fill Out a W-4: A Complete Guide

Spouse A would enter $3,490 on line 2a (the intersection of the $50,000–$59,999 row from the left-hand column and the $40,000–$49,999 column from the top row). Adding these two amounts together results in $6,640 for line 2c. For example, let’s look at a person who is married filing jointly. The current form asks you to record the number of dependents in your household, in Step 3. At Taxfyle, we connect small businesses and individuals with licensed, experienced CPAs or EAs in the US. We handle the hard part of finding the right tax professional by matching you with a pro with the right experience to meet your unique needs.

Additional penalties and interest could tack onto that total as well if you didn’t pay enough of your tax liability throughout the year. Feeling confident about your W-4 and have a relatively simple return at tax time? It’s an affordable and easy-to-navigate tax software that helps you file your taxes with confidence. They’ll help make sense of your personal tax situation and guide you toward getting your W-4 right on the money (literally) so you can keep the most cash in your paycheck on payday. After this step, you have the option to skip right to Step 5, where you’ll sign your W-4 and have your employer withhold the standard amount for your salary and filing status. Your employer will still withhold Social Security and Medicare taxes regardless of your exempt status.

In fact, the W-4 revamp and the tax changes since the TCJA may be a reason to look again at the W-4 you have on file and see if you need to make changes. The W-4 form had a complete makeover in 2020 and now has five sections instead of seven to fill out. Luckily, if you’re not changing jobs and have no reason to revise your W-4, you don’t have to fill out a new one. Finding an accountant to manage your bookkeeping and file taxes is a big decision. Yes, both of these forms start with the letter ‘w,’ but that’s where the similarities end.

• If your new company forgets to give you one for some reason, be sure to ask.
• Employers use the W-4 to calculate certain payroll taxes and send the taxes to the IRS and state and local authorities (if applicable) on behalf of employees.
• Once 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.
• Understanding the differences between the two forms is essential for accurate tax reporting and compliance with IRS regulations.
• The IRS advises that the worksheet should be completed by only one of a married couple, the one with the higher-paying job, to end up with the most accurate withholding.