Fill Out a W‐4
Most people receive W-4 forms from their employers when they begin working. Payroll departments use the information employees provide on their W-4 forms to determine how much money should be withheld from their paychecks for federal taxes. If you've just entered the workforce, filling out a W-4 form for the first time can be confusing.
Completing the Personal Allowance Worksheet
- Read the basic instructions provided by the IRS at the top of the form. A personal allowance reduces your taxable income. The more allowances you claim on your W-4, the less money will be withheld from your paycheck for taxes. In contrast, if you claim fewer allowances, more money will be withheld from your paycheck for taxes.
- Determine if someone is claiming you as a dependent. Generally, parents claim their children as dependents, but you can claim other relatives if you provide over half of their support and they meet the other IRS requirements to qualify as a dependent.
- If no one is claiming you as a dependent, you can enter a "1" in the blank provided for line A on the form.
- Enter an allowance for yourself. In line B, you will enter "1" to claim an additional allowance if you are single and only have one job. You also need to enter "1" if you are married, have only one job, and your spouse doesn't work, or if the total income from all work is $1,500 or less.
- Include an allowance for your spouse. If you are married, enter a "1" in the blank for line C to claim the allowance. If you have a working spouse or more than one job, you can enter "0" or leave the line blank if you prefer your taxes to be withheld at the higher single rate.
- Add allowances for each of the children or other dependents you support. If you have any children or other dependents, enter that number in the blank for line D.
- Determine whether you are the "Head of Household." You qualify for Head of Household if you are unmarried and pay for at least half of the household expenses of your dependents.
- If this description applies to you, enter a "1" in the blank for line E.
- Allowances you claim decrease the amount of money that is withheld from your paycheck for taxes. Therefore, if you are unsure whether you qualify as Head of Household, you should leave the line blank. If you have too little withheld from your paycheck for taxes, you'll end up owing the federal government money.
- Calculate your child or dependent care expenses.
If you have paid someone for childcare while you were working or looking for work, you may be able to deduct it on your taxes.
- If you paid more than $2,000 for this care, and you intend to take this credit, enter a "1" in the blank for line F.
- Decide whether you intend to take the Child Tax Credit. This credit allows you to reduce your tax liability by as much as $1,000 per qualifying child. Sons, daughters, stepchildren, foster children, and siblings generally are included as qualifying children for the purposes of this credit.
- If your total income for the year will be between $65,000 and $84,000, or between $100,000 and $119,000 if you are married filing jointly, enter a "1" for each qualifying child in the blank for line G.
- If your total income will be less than $65,000, or less than $100,000 if you are married filing jointly, enter "2" for each qualifying child. Subtract one if you have between two and four qualifying children; subtract two if you have five or more qualifying children. For example, if you have three children, you would enter "5" in the blank for line G: 2 + 2 + 2 - 1 = 5.
- Add up the number of allowances you have claimed on the worksheet and enter it in line H. You will put this number on line 5 of your W-4 form.
- For example, if you are married with two children and your spouse does not work, you would claim a total of four allowances: one for yourself, one for your spouse, and two for your children.
- Read the statement under line H to determine whether you need to complete the other worksheets. If you plan to itemize your deductions, you'll need to complete the Deductions and Adjustments Worksheet. If you have more than one job, or if you're married and both you and your spouse work, you'll need to fill out the Two-Earners/Multiple Jobs Worksheet.
- If neither of those descriptions applies to you, you can enter the amount from line H directly into line 5 on your withholding allowance certificate.
Completing the Employee's Withholding Allowance Certificate
- Fill out the personal information that is required. In the boxes numbered 1 and 2, you will enter your first and last name, address, and Social Security number.
- Identify whether you are single or married. In box 3, you must check the appropriate square to indicate whether you are single, married, or married but want taxes withheld from your paycheck at the higher single rate.
- You are considered single if you are unmarried, divorced, or legally separated according to state law. You also are considered single if you are married but your spouse is a nonresident of the United States.
- You are considered married if you are married according to state law. If your relationship status on the last day of the year is "married," then for the purposes of federal taxes you are married for the entire year.
- You can choose to withhold taxes at a single rate, which is higher, if you are married but would prefer to have more money kept from your paycheck.
- Record your total personal allowances. Take the number you entered in line H of your Personal Allowance Worksheet, or the result from the other worksheets you needed to use on the second page, and write it in box 5.
- Consider whether you want any additional money withheld from your paycheck. You may want additional money withheld, for example if you have other taxes such as self-employment taxes to pay. If you do, write down that amount as a dollar figure in box 6.
- Read the exemption claim. If you had no tax liability last year, and expect a full refund this year, you can write "exempt" in box 7.
- Sign and date your W-4 form. You've finished filling out the form, but it isn't valid until you sign and date it, declaring under penalty of perjury that all the information you provided is true and complete.
- When you've completed and signed your form, return it to your employer. Check your pay stubs to ensure the proper amount of money is being withheld each pay period.
- Review your W-4 form on an annual basis. You may want to add allowances if you received a large refund and would like to keep more money in your paycheck. In contrast, you may want to decrease your number of allowances if you had to pay the IRS last year.
- If any event happens that changes your withholding status, such as a birth or a divorce, you must file a new W-4 with your employer within 10 days of the event's occurrence.
Completing the Deductions and Adjustments Worksheet
- Figure out if you need to use the deductions and adjustments worksheet. You should use this worksheet only if you plan on itemizing your deductions such as mortgage interest, or taking certain credits or adjustments.
- This worksheet also takes into account other non-wage income you might have, such as dividends and interest.
- Determine your estimated itemized deductions for the year. Deductions reduce your tax liability. You can take the standard deduction, or itemize your deductions. Typically people choose to itemize their deductions when their total itemized deductions are greater than the standard deduction.
- For example, suppose you are single when you file your taxes in 2015. Your standard deduction would be $6,300. When you add up your itemized deductions, the total is $5,000. In that situation, you probably would choose to take the standard deduction.
- Enter the dollar amount of your estimated itemized deductions in the blank on line 1.
- Enter the appropriate standard deduction in the blank on line 2. The worksheet provides the standard deduction amounts based on your filing status. For example, if you are married filing jointly in 2015, you would enter $12,600 on line 2.
- Subtract the standard deduction from your estimated itemized deductions. If the result of that calculation is zero or a negative number, write "0" in the blank on line 3. To continue the previous example, subtracting $6,300 from $5,000 would produce a negative number, so you'd enter "0" on line 3.
- Calculate an estimate of any adjustments to income. and enter that amount on line 4. Adjustments, also called "above-the-line deductions," are amounts such as IRA contributions or student loan interest that you claim directly on your 1040 or 1040A.
- To continue the example, suppose you paid $2,000 in student loan interest that you planned to claim on your taxes. You would enter $2,000 on line 4.
- Add lines 3 and 4 and write that number on line 5. This is the total amount of deductions, credits, and adjustments you estimate you will claim in the year you fill out the W-4. If you are claiming tax credits, you will have to complete an additional worksheet to convert those credits to withholding allowances.
- The total in the example for line 5 would be $7,000.
- Write your estimated non-wage income in the blank on line 6. Non-wage income includes money you receive without working for it, such as interest or alimony.
- If you received $500 in interest income, for example, you'd enter $500 on line 6.
- Subtract the amount on line 6 from the amount on line 5 and enter the result on line 7. If the result is zero or a negative number, enter "0." To continue the example, you would subtract $500 from $7,000. The result is not zero or a negative number, so you would enter the result of $6,500 on line 7.
- Divide the amount on line 7 by $4,000 and write the result on line 8, dropping any fraction. In the example, you would divide $6,500 by $4,000 and the result would be 1.625. You would drop the decimals and enter "1" on line 8.
- Enter the number from line H on your Personal Allowances Worksheet on line 9. Since in the example you are single with no dependents, you have "1" on line H as well.
- Add the numbers on lines 8 and 9 and write the total on line 10. If you're planning on completing the Two-Earners/Multiple Jobs Worksheet, enter the total on the first line of that worksheet. If you don't need that worksheet, enter this number on line 5 of your Withholding Allowance Certificate. To finish up the example, you would enter "2" on your Withholding Allowance Certificate.
Completing the Two-Earners/Multiple Jobs Worksheet
- Decide if you need to use this worksheet. The Two-Earners/Multiple Jobs Worksheet is designed to make sure that single people with more than one job, or married couples who both work, have the correct amount of taxes withheld from their paychecks.
- You should only use this worksheet if the instructions under line H on your Personal Allowance Worksheet directed you to do so.
- Use the table provided to find the number that applies to the lowest paying job and enter that number on line 2. However, if the highest paying job pays $65,000 or less, you should not enter a number greater than "3."
- Compare the number you just entered on line 2 with the number you entered on line 1 from your Deductions and Adjustments Worksheet.
- If the number on line 1 is greater than or equal to the number on line 2, subtract line 2 from line 1. Enter that number on line 3 and on line 5 of your Withholding Allowance Certificate, and you are done with this worksheet.
- If the number on line 1 is less than the number on line 2, enter "0" on line 5 of your Withholding Allowance Certificate. You should then complete the rest of the worksheet to figure out what additional amount to have withheld from your paycheck. This will help you avoid having to pay the IRS when you file your taxes.
- Figure out how much additional money should be withheld from your paycheck. If you entered "0" on line 5, the worksheet includes some additional calculations so you won't be facing a big tax bill in April.
- Line 4 instructs you to enter the number from line 2 of the same worksheet. This was the number that corresponded to the lowest paying job. Assume, for example, that number was "3."
- On line 5 you'll need to enter the number from line 1 on the same worksheet, which was the final number you arrived at on line 10 of your Deductions and Adjustments Worksheet. To continue the example, assume that number was "1."
- Now subtract line 5 from line 4 and enter the result in line 6. In the example, the result would be "2."
- Using table 2 provided on the worksheet, find the amount that corresponds to the highest paying job. Assume you are married filing jointly, and your highest paying job pays $50,000 a year. According to the table, you should enter $600 on line 7.
- Now multiply line 7 by line 6 and enter the result on line 8. This is the total amount of additional withholding needed. In the example, that number would be $1,200.
- All you need to do now is divide that number by the number of pay periods remaining in the year. This depends on how often you're paid and what time of year you start. If you started the job for which you're filling out a W-4 in February and will be paid monthly, you would divide $1,200 by 10 because there are 10 pay periods left in the year. The result of that calculation, $120, is the additional amount of money that needs to be withheld from your paychecks. This is the amount you'd enter on your Withholding Allowance Certificate.
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