how to fill out a w4 for dummies

If employees have children under the age of 17, they should multiply the number of children by $2000 and enter it into the first box on the worksheet. For all other dependents, they should multiply by $500 and enter into the second box. Then, they should add the values from the first and the second boxes and enter the total into Line 3. All new employees have to fill out a W4 form when they’re hired—and if they want to change their withholdings, they can resubmit a new W4 form at any time. Form W-4 gives you the information you need to ensure accurate withholding for each of your employees. But Form W-4 went through some changes back in 2020—and your employees may have questions about how to fill it out.

When too much money is withheld from your paychecks, it means you’ve given the federal government an interest-free loan (as well as earning yourself a tax refund). If you do the opposite and withhold too little, this could mean an unexpected tax bill and perhaps a penalty when you file your return or even a penalty for underpayment. While you can stop here and allow your employer to simply withhold at default levels, the easiest path may not be the best. To get the right balance between paycheck and your refund, you might need to complete one or more additional steps – especially if you want to avoid additional withholding or surprises when you file. First, you’ll fill out your personal information including your name, address, social security number, and tax filing status.

Step 2: Multiple Jobs or Spouse Employment

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.

You only want to pay the IRS exactly what you owe them throughout the year. So, if you haven’t looked at your W-4 in several years and need to revise it (more on that below), make sure you understand the steps we walked through above. Now all you have to do is sign your John Hancock and boom—you’re all done.

File smarter.

Checking the box for the default method may seem like the easiest choice. But this will sometimes result in a refund check and much smaller paychecks throughout the year. If you are in a good enough financial situation, this may not seem like a big deal. But for some taxpayers, they’d like to maximize their paycheck amount while making sure their tax liability is covered for the year. You’ll need to account for all jobs you have and for your spouse if applicable and desired.

What if you’re married, filing jointly and completing your W-4 form? If you file as Married Filing Jointly — and you both earn around the same amount, there’s a box you can check to indicate that (it’s part of line 2c). If you try to account for them on both spouse’s forms, you’ll end up withholding too little and could face a hefty tax bill if not penalties at tax time.

How to Fill Out the W-4 Form

It’s a simple calculation where you multiply the number of children under age 17 by $2,000 and the number of other dependents by $500 – and add the two sums. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. The new form doesn’t have married but withhold at higher single rate is gone. For example, let’s look at a person who is married filing jointly.

how to fill out a w4 for dummies

If you have 0 dependents and adjustments, the standard amount will be withheld from your paychecks. While the withholding form uses the same underlying information as the old design, it replaces the complicated worksheets from the old form with more straightforward questions. These changes should make it easier for employees to more accurately determine how much should be withheld from their paychecks. 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. If you have more than one job or your spouse works, you’ll need to fill out Step 2. And if you have other income (not from jobs), you’ll be itemizing your deductions on your tax return or you want an extra amount withheld (including from other jobs), you can indicate your adjustments in Step 4.

Line (b)(ii) is for other pensions in retirement, by either the retiree or their spouse

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. These graphs are separated out by filing status, so you’ll need to select the correct graph based on how you file your taxes.

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