The Ultimate Guide to Filling Out a W-4 Form for 2023

how to fill out a w4 for dummies

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. Not claiming dependents is an easy way to make sure more money is withheld upfront. Therefore, many people will elect not to claim dependents to have more withheld now and receive a refund at the end of the year. It can also help if your employee has had problems with paying a tax bill and needs to repay the IRS for a past debt.

Filling out your W-4 for 2022 is a bit different than it was a few years ago, most notably because it no longer asks you to claim allowances. The 2017 tax reform (The Tax Cuts and Jobs Act) got rid of allowances until 2025, and the current W-4 reflects the removal of allowances. The current W-4, without allowances, may take longer to fill out for certain taxpayers, but it can also help you more accurately withhold tax. Step 4c is where you enter any amount you want your employer to withhold from each of your paychecks. Step 4 has three parts that allow you to withhold any additional tax if necessary. Each step asks you about different types of income or tax deductions, so that you can determine how much your employer should withhold for each item.

What else to know about Form W-4

As just noted, the form tells your employer how much federal income tax to withhold from your paycheck. You’ll need to complete a new W-4 every time you start a new job. If your new company forgets to give you one for some reason, be sure to ask. If your employer doesn’t have a W-4 form from you, the IRS requires it to treat you as a single tax filer, which means withholding the highest possible amount from your paycheck for taxes. You can get back the amount you overpay, but only in the new year when you file your tax return.

how to fill out a w4 for dummies

Since the IRS made changes to and redesigned the W-4 form, personal allowances no longer need to be included for 2020 and forward. Step 4 is designed for individuals with other income sources not subjected to withholding or those who plan to claim deductions other than the standard deduction. Here, you can specify other income such as interest or dividends and list down deductions like mortgage interest or charitable contributions. Once completed, give the signed form to your employer’s human resources or payroll team.

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Next, you’ll need to add the wages from your two highest-paying jobs together. This refers to not only married taxpayers filing jointly, but also taxpayers with multiple jobs. This will provide a W-4 printout for each taxpayer when filing jointly and allow the taxpayer(s) to complete a W-4 for Law Firm Accounting and Bookkeeping: Tips and Best Practices each job. Students may wonder how to fill out their W-4, especially if they’re eligible to be claimed by their parents. In general, this comes down to your age and whether you earn enough to file a tax return in the first place. In many cases, you can just fill out step 1 and sign on step 5.

how to fill out a w4 for dummies

Many employers and HR services allow you to change your W-4 digitally online, but your employer may require you to fill out and submit a paper form. If your state, county, city, or other local government collects income tax, your employer will likely require you to complete a state version of the W-4. Each state sets its own tax code, so each state will have its own version of this form. Your state may call their form a W-4, but the name and layout may also be completely different from the federal version. Once your W-4 form takes effect, you can use the IRS withholding calculator on or reference Pub. 505 to see whether the amount being withheld is comparable to the projected total tax for the year.

What Changes Does the New W4 Form Bring Along?

Instead of withholding allowances, now the employees have the option of claiming deductions in the form of dependents. When a candidate joins a new organization, the employer provides them with the IRS W4 form. It is important to fill this form as a part of joining formalities because this determines how much tax the employer would withhold from the employee’s paycheque.

  • Once you’ve meticulously filled out the necessary sections, it’s time to review, sign, and date your form before submitting it to your employer.
  • This estimator is particularly handy if you have a complex tax situation, such as multiple jobs or a long list of dependents.
  • Part 1 provides contact information and filing status, and Part 5 is the signature block.
  • Christina founded her own accounting consultancy and managed it for more than six years.
  • This is where you fill out the basic information on the form all about you and your personal data.

A dependent usually refers to a qualifying relative or a qualifying child who lives with the employee and is financially dependent. You only need to complete step 2 if you have more than one job or if you’re married and filing jointly with a spouse who also works. Completing this step is potentially the most complicated, but it ensures you withhold enough tax to cover all of your income. It’s a wise practice to review and possibly update your W-4 form annually, especially if there have been changes in your personal or financial situation. An annual review is a proactive approach to align your withholding with any alterations in tax laws or personal circumstances such as a change in marital status or the birth of a child.

What should one do if earning money from two jobs?

A W-2 is a form that your employer sends you during tax season and it tells you how much tax your employer withheld during the past tax year. A W-2 also lists the total income you earned and how much of your income was actually subject to tax. The best thing to do is to carefully take the time to fill out the W-4 worksheets and form to ensure the appropriate withholding amount.