How to Fill Out Form W-4 Step-by-Step

Filling out Form W-4 can seem complicated, but it’s an important document that determines how much tax is withheld from your paycheck. Getting it right means you can avoid owing taxes or getting a big refund when you file your return. This step-by-step guide will walk you through how to accurately fill out a W-4.

What is Form W-4?

The W-4 is an IRS form used by employers to determine federal income tax withholding. When starting a new job, you fill out a W-4 to tell your employer how much tax to deduct from each paycheck.

The amount withheld contributes towards your total annual tax bill. If not enough tax is withheld, you will owe the IRS when you file If too much is withheld, you get a refund The ideal is to have your withholding match your tax liability closely so you don’t owe or get refunded a large amount.

You can file a new W-4 at any time if your circumstances change Events like marriage, divorce, a new child, or a major raise can all impact your tax situation and withholding needs The IRS also recommends checking your withholding annually and making updates as needed.

How to Fill Out Form W-4

Filling out a W-4 properly takes a bit of planning, but getting it right can save you money over the course of the year. Follow these steps:

Step 1: Personal Information

• Name and address: Provide your legal name and current mailing address.

• Social security number: Double check your SSN is correct.

• Filing status: Choose from single, married filing jointly, married filing separately, or head of household. Your status determines tax rates and available credits and deductions.

Step 2: Multiple Jobs

If you have more than one job at once or are married filing jointly and both spouses work, use this step. The instructions help coordinate withholding across jobs so you don’t have too little or too much tax taken out overall.

• For your highest paying job: Fill out Steps 3-4b.

• For other jobs: Leave those steps blank and check box 2c if applicable.

• If you have two roughly equal paying jobs: Check box 2c on the W-4s for both jobs.

Step 3: Claim Dependents

• Enter number of dependents: List dependents you plan to claim on your tax return. Eligible children under 17 qualify for the full $2,000 child tax credit. Other dependents get you a $500 credit.

• Child tax credit amount: Multiply number of eligible children by $2,000 credit.

• Other dependents amount: Multiply number of other dependents by $500 credit.

• Add lines together for total credits. Reducing withholding by this amount helps account for these tax credits you expect to receive.

Step 4: Extra Withholding

Use this step to fine tune your withholding if needed.

• 4a – Other income: Account for non-job income like interest, dividends, or alimony you expect to receive.

• 4b – Deductions: Reduce withholding if you plan to itemize deductions beyond the standard deduction on your tax return.

• 4c – Extra withholding: Enter any additional tax you want withheld from each pay period. This helps cover side freelancing, investment income, or create a cushion in case your withholding is too low overall.

Step 5: Date and Signature

Don’t forget to sign and date before submitting to your employer!

W-4 FAQs

When should I submit a new W-4?

Submit a new W-4 when you start a job, but also anytime your situation changes substantially. Getting married, having a child, taking on side work, or major raise can all impact your taxes owed. The IRS recommends everyone review withholding annually.

How do I get exact amount withheld to cover my total tax?

Perfectly dialing in your withholding is tricky. Make sure your W-4 reflects current dependents, income sources, and deductions you anticipate. Use line 4c to add a bit more as a buffer if needed. The IRS withholding estimator can provide suggestions too.

What if I have multiple jobs at once?

Coordinate withholding carefully across jobs using Step 2. Withholding too little results in a tax bill, too much gives an interest-free loan to Uncle Sam.

Should I claim zero allowances to increase withholding?

The allowances approach on old W-4s is gone. Now you must use dependents, credits, and extra withholding fields to increase tax taken out. Claiming zero dependents may help boost withholding if needed.

What if my spouse and I both work?

Make sure one W-4 accounts for the standard deduction, applicable tax credits, and potential deductions. The other should use Step 2 box 2c to avoid under-withholding. Coordinate closely and check withholding levels regularly.

Tips for Getting it Right

• Use the IRS withholding calculator to estimate your total tax and ideal withholding.

• Refer to your prior year tax return to help predict current year income, credits and deductions.

• Overestimate your income and withholding if unsure. It’s better to get a refund than owe end-of-year taxes.

• Check your pay stub regularly to make sure taxes withheld seems on track based on earnings.

• Submit a new W-4 mid-year if your situation changes substantially to keep withholding accurate.

The Bottom Line

While filling out a W-4 takes some planning, it’s worth taking the time to complete it accurately. Withholding too little or too much tax can cost you down the road. Use this step-by-step guide and IRS resources like the withholding calculator to get it right. That way you can avoid headaches at tax time next year.