The IRS and the employers require every employee to fill the W4 form, this form gives your employer an idea about how much they should withhold from the employee’s paycheck to give federal taxes. Whether you have just joined a new job or you have been working for a while, you will be required to fill out this form. It is one of the most important tax documents that you will have to fill. This form helps find a balance between getting a tax refund at the end of the tax season, and owing taxes. If you want to understand the W4 Form and how to fill it out, you will find this blog helpful.
W4 Form: What Is It?
The W-4 form, employee withholding certificate is an IRS form that needs to be filled by all the employees with correct information; so that the employers can withhold the correct amount of taxes from the paycheck. It’s not mandatory to fill out this form every year, but if you are a new employee or you have had some financial changes and you want to adjust your withholdings, you should fill out the W4 form.
When Should You Fill Out The W4 Form?
Like I have mentioned above, it is not mandatory to fill out the W4 form if you have already filled it out once, but there are situations when you will need to fill a new form. The first and the most obvious one is when you join a new job it will be mandatory to fill the W4 form. You should also refill the form if you have children and new dependents, and when you get a raise or pay cut. You will also need to fill it if you get married and your spouse works as well, or if you have a second job. If you have had a life-changing situation, revisiting your W4 form will be a good idea.
How To Fill Out The New W4 Form?
The W4 form has changed greatly in 2020, the main change being that there is no personal allowance as it has been removed. Now, if you want to lower your tax withholding you should claim dependence. Here’s how to fill out the new W4 form:
Step 1: The first step is to enter all your details, such as your name, address, and social security number. You need to make sure that you do not make any errors while filling out your personal details. You will also have to check in the status, whether you are single or married and filing separately, married filing jointly or qualifying widow, or as head of household.
Step 2: You will only need to fill the second step if you have more than one job, or if you are married and filing jointly, and if both you and your spouse work. In this second step, you have three options to choose from; the first option is to use the IRS Tax Withholding Estimator tool, the second option is to fill out the multiple job worksheet, and the third option is for if you and your spouse earn the same amount.
Step 3: The third step is for claiming dependents including your children if you have any. If you have children under 17 or any other qualified dependents, you should fill out this section. You can enter the number of kids and dependents you have and then multiply them by the credit amount.
Step 4: The fourth step is to refine your withholding, in this step, you can include other income that’s not related to jobs if you are claiming itemized deductions, and if you want to withhold additional tax from your paycheck for a while.
The last and final step is to put your sign once you have completed every step. When it comes to filing the W4 form, you need to change the information as needed if you have financial changes.