Have you ever thought about how much control you have over the taxes taken from your paycheck? If you want the answer, then you have to go through your Form W-4, known as the employer’s withholding certificate.
The form is issued by the IRS and is used by all employees working in the USA. The forms state the information about one’s tax situation to their employer. If you are new to the US, you should be aware of the W-4 form.
Contents
Form W-4 Guide
The employee’s withholding certificate is also known as the W-4 form, which is issued by the IRS. The aim of the form is to inform an employer of their employees’ tax situation. Based on the data filled by the employee in their form, the employer determines the correct amount of federal income tax they withhold from the paycheck.
Therefore, it is very important to know how to fill out the form accurately, as getting this right will make all the difference between owing the IRS and having a manageable tax situation year-round. If you are new to the country or this is your first time filling out the form, this guide is for you.
Process of Filing the IRS W-4 Form: Overview
| Article on | Process of Filing the IRS W-4 Form |
| Country | USA |
| Department | IRS |
| Official website | irs.gov |
About the W-4 Form
Filing the W-4 is a huge step in everyone’s career, as the information one will put in the form will directly impact their paycheck amount and also their potential tax refund. If you think that filling out the form is just adding your name and checking some boxes, then you are totally wrong.
You have to fill out the form very carefully with precision and accuracy. Before 2020, the form was a little typical to understand, so the IRS decided to redesign the W-4 form in 2019. By 2020, the new form was circulated in the country, which was much easier to understand than before.
“For years, the withholding system has been complex for many people, and the redesigned Form W-4 will help taxpayers get it right.” – Chuck Rettig (IRS Commissioner)
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The primary aim of the redesign of the form was to make it more comprehensible, but the IRS also wanted to improve the tax system in the USA. This particular change was a step towards a more accurate and modern tax system in the country.
“This redesigned form, along with the withholding estimator, is are important step toward our goal of creating a more modern and accurate tax system. – Steven Mnuchin (Treasury Secretary, December 2019)
Process of filling out the IRS W-4 Form
The W-4 form is usually filled out at the start of a new job and is filled out at the beginning of employment. If you are starting your career, then for you it is very important to know the process of filling out the form. The withholding amount from the paycheck will either result in a large refund or you may owe a penalty for underpayment.
Times or situations when the IRS W-4 form needs to be filled out
- New job (job change)
- Marriage
- Childbirth ( a new baby)
- Addition of a dependent
- Divorce
Below are the steps to fill out the W-4 form:
1. Add your personal information
The first step is to mention all your personal information. This information includes name, address, your SSN, and your tax filing situation. There are 5 kinds of tax filing situations one can choose from
- Single
- Married and filing jointly
- Married and filing separately
- Head of the household
- Qualifying surviving spouse
If you want, you can stop here and hand over all the other information to your employer, and this will be the easiest way to deal with this, but it might be the best way. To make sure your withholding amount is set right, you need to complete all the next steps in the process.
2. Add all your jobs and income sources (Yours and your Spouse’s)
If you are refilling your W-4 form, then you have to keep in mind to mention all income or combined income in your form. Also, if there is any income from self-employment. If you do not do that, there might be a chance that the withholding rate might be set at a lower rate. The table below shows the three choices available for calculating the combined income for the W-4 form.
| Method | When to Use It | Key Details |
| Online Estimator | If one has self-employment income and wants to account for self-employment taxes in addition to income taxes. | You will get a specific amount to have your employer withhold each pay period. This method also works well if you’d prefer not to give your employer information about other income. |
| Worksheet | There are multiple jobs in your household (either you have multiple jobs or you and your spouse each work). | The worksheet is attached to the W-4 form. This method also works well if you’d prefer not to give your employer information about other income. |
| Check a Box | There are only two jobs with a similar amount of pay. | This option has your employer withhold at a default rate. You must check the box on the W-4 for both jobs. This option splits the standard deduction in half for each job. |
3. Mention children and other dependents
If you have a child in your household, you should make sure that one of the parents ( you or your spouse) has the child’s related tax credits in their withholding. It is best if it is allowed who has the highest-paying job. If both partners allow the credit in the form, then there might be chances that they have to pay an extra amount to the IRS at the year’s end.
4. Other adjustments
In this step, you need to check if you have any other income source, any deductions that are qualifyifiable, or an extra wihouding amount you want your employer to take.
| Adjustments | Impact |
| Citing other income | The amount added will increase the withholding amount |
| Claiming deductions | The amount added will decrease the withholding amount |
| Extra withholding | The amount added will increase the withholding amount |
5. Sign the form and mention the date
After completing all the above-mentioned steps, you have to sign the form and then give it to the employer. From there all the entire process will be done by them or their company.
Frequently Asked Questions
What is the W4 form in the USA?
The form is known as the employee’s withholding certificate and is completed by an employer working in the country.
Who issues the W-4 form in the USA?
The IRS.
Will I have to refill the W-4 form if I recently got married?
Yes, you need to fill out the form once again and mention the family situation in it.
What are the situations when one needs to fill out a new W-4?
New job (job change)
Marriage
Childbirth ( a new baby)
Addition of a dependent
Divorce