The Essential Guide to Filling Out a W-4 Form: Step-by-Step Instructions

Are you a new employee? If so, you’ve probably heard your employer mention a Form W-4. This form is an incredibly important document that you must complete when starting a new job.

What is a Form W-4?

A Form W-4 is an Internal Revenue Service document that provides your employer with the information they need to properly withhold federal income tax from your paycheck. The information you provide on the form determines how much money to withhold from your paycheck for taxes.

You do not have to fill out the new W-4 form if you already have one on file with your employer. You also don’t have to fill out a new W-4 every year. If you start a new job or want to adjust your withholdings at your current job, you’ll likely need to fill out the new W-4.

Here’s how to fill out a W-4 form:

Gather Your Information

Before you start filling out your W-4 form, you’ll need to have some basic information on hand. You’ll need your Social Security Number and your filing status (single, married, etc.). If you are married or have two jobs, you’ll need to know how much annual income you expect to receive from each job. If you have children or other dependents, you need to know how many you plan to claim.

Fill Out the W-4 Form

Step 1: Enter Personal Information

Once you’ve gathered your information, you’re ready to fill out the W-4 form. This form will ask for your name, address, Social Security Number and filing status. Be sure to double-check your information for accuracy before submitting the form to your employer.

Step 2:  Multiple Jobs or Spouse Works

If you have more than one job, or you file Married filing jointly and your spouse works, you may need to complete the Multiple Jobs Worksheet. This will help calculate extra tax that may need to be withheld.  If both jobs are similar income, you can check the box in Step 2c instead of filling out the worksheet.

Note: The most common cause of under-withheld taxes in a two-income family is missing the box in Step 2c.

Step 3: Claim Dependent and Other Credits

Claim Dependents: If you earn $200,000 or less ($400,000 or less for married filing jointly), this section allows you to calculate the Child Tax Credit or miscellaneous dependent credits for which you qualify and have them factored into your regular payroll withholding. This means you would receive more net pay throughout the year but would not receive the credits on your tax return at the end of the year. If you prefer to receive the credits on your tax return, you can leave this section blank.

Note: If you are married, be sure only you or your spouse claims the dependent credits, not both of you.

Step 4: Other Adjustments

  • Other Adjustments (optional): This section allows you to request additional withholding to cover tax liability for other income that will not be subject to withholding, such as interest and dividends. You may also request to reduce your withholding because you plan to claim deductions other than the standard deduction. This should be used if you have more than one job or your spouse works and you did not check Box 2c
  • Extra Withholding: This line allows you to specify an additional amount of withholding to be taken out with each paycheck. This line is recommended if you feel that you need additional withholdings that go above the standard withholding amounts.

Step 5: Sign and Submit

Once you’ve filled out the form, you’ll need to sign it. Signing the form certifies that the information you provided is accurate. After you’ve signed the form, you can submit it to your employer.

Download Form W-4 via the IRS website. You can also access prior-year forms and FAQs here.

What should you put on a W-4 Form?

If you had a large tax bill when you filed your tax return last year and don’t want another, you can use Form W-4 to increase your withholding. That’ll help you owe less (or nothing) next time you file. If you received a significant refund last year, you’re giving the government a free loan and could be needlessly living on less of your paycheck all year. Consider using Form W-4 to reduce your withholding.

If your objective is to engineer your paycheck withholdings so that you end up with a $0 tax bill when you file your annual return, then the accuracy of your W-4 is crucial. Here are a few tips on how to use a W-4 to owe nothing on a tax return:

  • Use the correct tax-filing status.
  • Make sure your W-4 reflects your current family situation.
  • Accurately estimate your other sources of income.
  • Accurately estimate your deductions.
  • Take advantage of the line for extra withholding.

You should check your pay stubs at least a few times a year – certainly by the middle of the year – to see how much is being withheld and determine whether it will be sufficient to cover your expected tax liability. It’s better to look now than to wait until December when it’s too late.

Filling out a W-4 form correctly ensures that the right amount of money is withheld from your paycheck for taxes. If you would like to discuss questions about Form W-4, contact an Adams Brown advisor.