What Is the W4 Form and How Do You Fill It Out? Simple Guide

This additional withholding goes toward your income taxes and helps you right-size your taxes so that you aren’t underpaying over the year. Ideally, you’ll neither owe a significant amount of money nor get a big refund when you file your tax return in April. Each time you get paid, your employer takes out (withholds) a certain amount of money from your paycheck.

Make sure to complete Steps 3–4(B) on the W-4 of your highest-paying job only if you are submitting for multiple jobs. Leave these steps blank on the other job forms to ensure accuracy. The form generally only requires re-filing if the employee switches jobs or has experienced a change in circumstances that warrants modifying how much money from their paychecks is withheld for taxes. To accurately fill in line 1, you’ll need to use the graphs provided on page four of Form W-4.

What If an Employee Doesn’t Submit a W-4?

This calculation can be a bit tricky if you itemize deductions. You’ll have to estimate your 2024 itemized deductions, then subtract the standard deduction for your filing status. Also, you can enter an estimate for student loan interest, deductible IRA contributions, and certain other adjustments on Line 4 of the worksheet. You’ll then add how to fill out a w4 for dummies those numbers together and move the total to Line 4(b) of W-4 Page 1. Now, it’s much more straightforward and designed to give taxpayers the most accurate withholding. Ideally, this means you’re more likely to have less taxes taken out of your paycheck and more money in your pocket without owing a huge tax bill at the end of the year.

An employer generally withholds income tax from their employee’s paycheck and pays it to the IRS on their behalf. Wages paid, along with any amounts withheld, are reflected on the Form W-2, Wage and Tax Statement, the employee receives at the end of the year. You’re likely better off having the money that’s rightfully yours in a savings account or other fund than with the IRS, so you can access that money on your own terms. The good news is that with a little math and a bit of brainpower, you can easily adjust the tax withholding on your W-4. And remember, you can get a copy of and change your W-4 whenever you want and as many times as you want. So, there’s really no reason to put off important adjustments after a big life-change or a few not-so-awesome surprises during tax season.

What Is Federal Tax Withholding?

If you want an extra set amount withheld from each paycheck to cover taxes on freelance income or other income, you can enter it on lines 4(a) and 4(c) of Form W-4. If your objective is to engineer your paycheck withholdings so that you end up with a $0 tax bill when you file your annual return, then the accuracy of your W-4 is crucial. If you want less taxes taken out of your paychecks, perhaps leading to having to pay a tax bill when you file your annual return, here’s how you might adjust your W-4. You have to fill out a W-4 when you start a new job, but you can adjust it at any time.

• Similarly, understanding the 2024 W-4 for dummies is like having a roadmap for managing your finances effectively.
• The form now requires employees to select their filing status from a drop-down menu and input additional income from non-job sources if applicable.
• On the flip side, having too much withheld from your paycheck means overpaying your taxes and results in a tax refund check.
• The way that you fill out Form W-4, Employee’s Withholding Certificate, determines how much tax your employer will withhold from your paycheck.
• This section allows you to list all of your dependents, making sure the appropriate Child Tax Credit amount is deducted from your withholding.
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In the past, choosing 0 allowances meant your employer would withhold the maximum amount from your paycheck while choosing 1 allowance meant reducing the withholding amount. There have been no major changes to the document in 2024, but the IRS has made a few small adjustments to make filling it out accurately even easier than it was before. If you’re an employer running a US-based business, FreshBooks Payroll software can help you onboard new employees, automatically run payroll, and make sure you stay compliant with tax and labor laws. This section will tell your employer what they need to know about your overall tax liability, either as a single filer, in conjunction with your spouse, or as a head of household.

Employee’s Withholding Allowance Certificate

Employees must fill out a W-4 form employers use to determine how much tax to withhold from the employee’s paycheck. The IRS changed the W-4 form in 2023, which now makes minor changes to the previous version. Key updates in the 2024 W-4 Form include incorporating a redesigned layout for better clarity and ease of use. The form now requires employees to select their filing status from a drop-down menu and input additional income from non-job sources if applicable. It also asks how many dependents you have and if you have other income (not from jobs), deductions or extra withholding.

Previously, the number of allowances and your tax filing status determined how much income tax was withheld from your pay. When you start a new job — or change your name or marital status — you will probably have to fill out a new W-4 tax form. But if you have dependents, multiple sources of income, or other deductions that raise or lower your tax liability (what you owe), you’ll have to dig into the next three steps to get your tax withholding just right. Form W-4 tells your employer how much money to withhold from your paycheck to send to IRS for income taxes, which is called federal tax withholding. 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. All you have to do is fill in your name, address, Social Security number, and filing status, then sign and date the form.

What’s on Form W-4?

An automated payroll system can help employers accurately withhold the correct amount of tax using the information provided on the W-4 form. You should complete the redesigned W-4 only if you started a new job – or if your filing status or financial situation has changed. You do not need to fill out the new form if you have not changed employers. Your company can still use the information provided on the old W-4 form.

• If you already calculated that number when you completed Step 2, you’re done!
• The Child Tax Credit and Advance Child Tax Credit Payments are not taxable and therefore are not relevant to the information on your W-4 form.
• A W-4 form, or “Employee’s Withholding Certificate,” is an IRS tax document that employees fill out and submit to their employers.
• It’s like equipping yourself with glasses that bring clarity to a blurry financial landscape, enabling you to make informed decisions and steer your fiscal journey precisely.
• It details how much the employer paid you, and how much withholding tax was deducted from your pay during the tax year.
• Fill out the Multiple Jobs Worksheet, which is provided on page three of Form W-4, and enter the result in step 4(c), as explained below.

Your W-4 form will display several distinct sections for you to fill out. Be sure to only fill out sections that are relevant to your work and life in the previous year. Follow the steps below to complete your W-4 form with confidence.