Each time you begin a new job, your employer gives you a W-4 form to complete. This form tells your boss how much to take out of each paycheck for federal income taxes. Virtually every job – including part-time gigs and work study arrangements – is subject to federal employment tax rules. Depending on the state you live in, you might also have to complete a similar form for state withholding purposes. Each state varies, but if your state has its own W-4, you’ll have to provide similar information on each form.
Complete your name, address and Social Security number in boxes 1 and 2 of the Allowance Certificate. If your last name is different than the name on your Social Security card, check the box in section 4 and follow the instructions for getting a replacement card.
Choose your marital status in section 3. If you’re married and file a joint return, check the “Married” box. If you’re married and file separate returns, check the “Married, but withhold at higher Single rate” box. Your employer will withhold taxes at a higher rate to compensate for the higher married filing separate tax rates charged by the Internal Revenue Service.
Use the Personal Allowances Worksheet. This worksheet helps you calculate the number of exemptions you should claim. Your employer matches your exemptions and filing status to withholding tables to calculate the amount of income tax to subtract from your pay. If you’re an unmarried student age 24 or younger, your parents may still claim you as a dependent on their taxes. If your parents do claim you, don’t enter a 1 on line A of the worksheet.
Plan for your spouse’s income. If you’re married and your spouse also works, you can’t each claim the same number of allowances. One of you may claim “1” on lines B and/or C of the worksheet, and the other spouse can claim the opposite. For example, if one spouse claims 1 on both lines, the other spouse should not enter 1 on either line of his worksheet. If you claim a 1 on line B or C, your spouse can claim 1 on the line you didn’t claim anything.
Total all your numbers from lines A through G of the Worksheet. Enter the result on line H of the worksheet and on line 5 of the W-4 form.
Factor in multiple jobs. If you have more than one job, or are married and file a joint return, use the worksheets on page 2 of the W-4 form to calculate any extra withholding you need to cover your tax bill at the end of the year. Enter results from line 9 of the multiple earner worksheet on line 6 of your W-4 allowance certificate. Your employer will withhold this amount in addition to the income tax required for your allowances on line 5.
Avoid claiming exempt. When you claim exempt, your employer withholds zero income tax. This is dangerous territory because almost all income you receive is taxable. You can claim exempt when you received a refund of all your income tax on your last return and expect to receive a refund of all your income tax on your next return. If this applies, write “Exempt” on line 7. However, if you earn more income this year than you did last year, you will owe more in taxes and may actually have a tax bill if you choose to claim exempt.
Sign and date your form and give the W-4 to your employer.
- Use the IRS withholding calculator tool on the IRS website to see how many allowances you should claim.
- At any time, you can complete a new W-4 form and give it to your employer if you need to change your allowances. There is no limit to the number of times you can do this.
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