Filing out a W-4 form can be a little confusing for people, especially if they are just starting a new job or adjusting their tax withholdings. Officially known as the Employee’s Withholding Certificate, the Form W4 tells the employers how much federal income tax should be deducted from your paycheck. The correct filing of this form makes sure that you avoid owing any tax money or being over-withheld for the entire year. Now, there are many people who are not sure about the process for filing this form, which is why in the guide, we will break down every section carefully so that you can also complete the same.
Basic requirements before filing the form:
Before we tell you how to fill out a W4 for dummies, you should be familiar with the important documents and information that you should have. :
- Recent pay stubs
- Previous year’s tax return
- Information about your spouse’s income (if married)
- Details about any extra jobs or freelance income
Access to this information ensures that all your entries are more accurate and there are no errors.
A Step-by-Step Guide to Filing the W-4 Form
Now that you know what is a W4, let’s move forward and explore the steps that you need to easily fill out this form.
Step 1: Enter Personal Information
The first step is always the easiest, as here you need to enter your personal information, such as your name, address, social security status, and filing status (Single, Married filing jointly, or Head of household). This information will affect your tax rate, so make sure that the information is accurate.
Step 2: Multiple Jobs or Working Spouse
This part is helpful in determining the correct total tax deduction when:
- There is a single person holding two jobs or
- The married couple works
The taxpayer has three options in this case:
- The IRS online estimator can be used for the most accurate results.
- The W-4 form contains the worksheet on page 3.
- The box must be checked if there are only two jobs in the family and both pay similarly.
Bypassing this step may result in under-withholding, which in turn means that you might be required to pay taxes later.
Step 3: Claim Dependents
In case of having children or other dependents who qualify, one can receive tax credits. The W-4 form gives the direction to multiply the number of dependents by the credit amounts:
- $2,000 for each child up to 17 years of age
- $500 for other dependents
Put the sum result in this area. This will be taken as a reduction in your withholding.
Step 4: Optional Adjustments
This part is for the ones who want to be precise with their tax withholdings.
- 4(a) – Other Income – Options like freelance, ivtesments, and interests fall under this category, as they are not subject to withholding.Â
- 4(b) – Deductions – If you are claiming deductions other than the standard, you should mention the amount here, including mortgage interest, medical expenses, and other items.Â
- 4(c) – Extra Withholding – If you want your employer to take out additional money from each paycheck, write down a flat amount. This will be helpful if you had to pay taxes last year.
Step 5: Sign and Date
A signed W-4 tax form is a must for it to be valid. Once you sign it, give it to your employer (not to the IRS).
