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

how to fill out a w4 for dummies

A tax withholding estimator is a tool that will give you the exact amount that you need to withhold. For 2b, add the value for the two jobs that have the highest annual wages. Use the lowest paying job in the “Lower Paying Job” column to find the amount from the appropriate table on page 4. If you already have a W-4 on file for your existing job, you do not need to change anything yet. However, if you started a new job recently, plan to make any personal life status adjustments, or you want to increase or decrease your amount withheld, you will need to fill out the new W-4 form.

how to fill out a w4 for dummies

When filling out the Multiple Jobs Worksheet, the first thing you will need to differentiate is whether you have two jobs (including both you and your spouse), or three, or Bookkeeping for Independent Contractors and Small Businesses more. If you and your spouse each have one job, then you’ll complete line 1 on the form. If you have two jobs and your spouse does not work, you will also complete line 1.

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The new form also provides more privacy in the sense that if you do not want your employer to know you have more than one job, you do not turn in the multiple job worksheet. All you have to do is fill in your name, address, Social Security number, and filing status, then sign and date the form. If you answered yes to any of the questions above, it’s a good idea to revisit your W-4 and figure out your new income tax withholdings. All of these types of life changes can affect the amount of taxes you owe.

If you’ve withheld too little, you’ll likely have to pay the difference to the IRS when you file your taxes. If you got a huge tax bill when you filed your tax return last year and don’t want another, you can use Form W-4 to increase your withholding. If you got a huge refund last year, you’re giving the government a free loan and could be accidentally living on less of your paycheck all year.

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A W-4 is a form telling your employer how much tax to withhold from each of your paychecks. Your employer will take those withholdings and pay the IRS on your behalf. At the end of the year, you’ll receive a W-2 from your employer showing how much is withheld from each paycheck throughout the year. If too much has been withheld, you’ll receive a refund from the IRS.

how to fill out a w4 for dummies

In 2020, a new W-4 form was introduced to alleviate any confusion and underpaying that the previous form provided. On the new form, employees who want to lower their tax withholding must claim dependents or use a deductions worksheet. It’s important to complete 2023 Consumer Products Industry Outlook Deloitte US the form accurately because if too little is withheld, you may owe tax to the Internal Revenue Service (IRS) when you file your tax return and then owe a penalty. When you change jobs, or your personal or financial situation changes, complete a new W-4 form.

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Line 4(a) asks you to tally up all other taxable income not earned from jobs, such as interest, dividends or retirement income. That way, you can deduct the necessary tax out of your paycheck now so you don’t have to pay it later. However, if you have a change in circumstances that affects how much money should be withheld from your paycheck, completing a new W-4 is advised. If you’ve recently gotten a new job, you’ve likely come across an IRS Form W-4. A W-4 is one of many tax forms that helps the government assess tax liabilities to taxpayers. The information contained in this article is not tax or legal advice and is not a substitute for such advice.

how to fill out a w4 for dummies