How to Fill Out the New W4: Tax Season Resources

This section is for if you work multiple jobs at the same time or are married filing jointly and both you and your spouse are employed. To be accurate, both spouses should fill out the new Form W-4 for each job. The IRS made significant changes to the W-4 form in 2020 and the updated form should provide you the means to more accurately withhold federal income tax.

If not, you probably don’t need to change what you’re doing. If you did owe, don’t change your allowances, just add additional withholding to make up the difference in tax that you owed. It’s harder to qualify for EIC when you’re married because if both spouses work, the second income often kicks you over the limit. If only one spouse is working, check the married box and claim 2 allowances for you and your spouse together, plus 4 more for every child under the age of 17. Before you begin filling out the W-4 form, plan to sit down with your spouse to determine whether or not you will be filing a joint tax return together for the current year. Also review the information you’ll need to complete the form.

Step 4: Refine your withholdings

Form W-4 is crucial to employee tax reporting and employer withholding. This form got a major overhaul from the IRS in 2020, but there are some updates for 2023 as well. And many employees don’t know how to fill out Form W-4 correctly—which can lead to an unpleasant surprise when they owe more taxes than expected.

• We believe everyone should be able to make financial decisions with confidence.
• First, you’ll need to fill out your personal information, including your legal name, residential address and Social Security number.
• If it doesn’t seem like it’ll be enough to cover your whole tax bill, or if it seems like it’ll end up being way too much, you can submit another W-4 and adjust.
• Securities and Exchange Commission as an investment adviser.
• Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted.
• • Form W-4 changed because the Tax Cuts and Jobs Act removed personal exemptions, increased the Standard Deduction, and made the Child Tax Credit available to more people.

Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. SmartAsset Advisors, LLC (“SmartAsset”), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S.

Count the number of jobs held by you and your spouse (if applicable)

Enter this figure on line 4 of the Multiple Jobs Worksheet and line 4c of Form W-4. When filling out the Multiple Jobs Worksheet, the first thing you will need to differentiate is whether you have two jobs (including both you and your spouse), or three, or more. If you and your spouse each have one job, then you’ll complete line 1 on the form. If you have two jobs and your spouse does not work, you will also complete line 1. Employers use the W-4 to calculate certain payroll taxes and remit the taxes to the IRS and state and local authorities (if applicable) on behalf of employees.

• The number of allowances you should claim if you are single depends on your income and other factors such as whether or not you have other sources of income or deductions.
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• Instead, you now directly enter dollar amounts for dependents based on child tax credits.
• When you sign this form you are also stating that “under penalties of perjury, [you] declare that this certificate, to the best of [your] knowledge and belief, is true, correct, and complete.”
• If you got a huge 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.
• However, if you have too much tax withheld, your monthly budget will be tighter than it needs to be.

What’s more, when you complete your W-4, it doesn’t go to the IRS but instead to your employer who will keep the form on file for at least four years. The IRS, however, reviews withholdings, so it’s important to complete your W-4 form correctly, or you could end up with a higher tax bill. If you start a new job and you’re making the same pay, for example, you can check the box on 2C for both of these jobs. For your tax filing status, check only one of the three boxes. If you forget to submit your W-4 in time for the end of the year, the IRS will treat your income like that of a single person without any withholding allowances.

2023 tax brackets and federal income tax rates

While the underlying information is the same, the new W-4 “replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees,” according to the IRS. The form has changed to use a more comprehensive formula for determining tax withholdings. A W-4 with the 0 or 1 question indicates that your employer is using an outdated W-4 form. A 0 will result in more taxes being withheld from each paycheck, while 1 will allow you to take home more money if you choose — though it may result in a tax bill at the end of the year if you withhold too much.

But it’s also wise to revisit it periodically as your income, personal situation, and filing status changes. Employees that use their W4 for tax withholdings might then be more likely to owe taxes when they file taxes each year. Taxpayers are required by law to pay most of their tax obligation during the year rather than at the end of the year. This can be done by either changing your deductions and having more tax withheld from paychecks or pension payments, or by making estimated tax payments. For line 4(a), you’ll tally up all other taxable income not earned from jobs, including interest, dividends and retirement income.

Tax Planning and Your Financial Plan

(c) Mark the box found in substep C of step 2 if there are only 2 jobs total in your household. The IRS recently updated the W4 tax forms used at the start of a new job. Continue reading for a complete guide on how to fill out the new W4 form.

Additionally, seeking guidance from a trusted tax professional can also be beneficial. Even though you may not need to fill out the new W-4 form, it’s a good idea to periodically re-examine your life circumstances and update the information when warranted. Now there are straightforward https://www.bookstime.com/articles/how-to-fill-out-w-4 questions that are easy to understand and easy to answer so filling out your W4 is quick and painless. The next dollar amount should be the number of all other dependents multiplied by $500. You will only fill out the following steps (steps 2 through 4) if they apply to you.

The W-4 form should be coordinated on all jobs for accurate tax withholding (TRUE).

Having dependents can make taxpayers eligible for certain tax credits and deductions. If you receive taxable income that isn’t from wages — like interest, dividends or distributions from a traditional IRA — you can have your employer withhold tax from your paycheck to cover the extra taxes. Just put the estimated total amount of this income for the year on Line 4(a) of your W-4 form and your employer will calculate the proper withholding amount for each pay period. In most cases, you won’t have to submit estimated tax payments for this income. They’ll need to know what their total deductions were last year, if they still qualify for the child tax credit, how much non-wage income they reported on their last return, and similar tax-related things. “Nobody remembers that off the top of their head,” he notes, “so it could be time consuming” collecting the necessary information.

Use the IRS’s Tax Withholding Estimator or the Multiple Jobs Worksheet provided in the form’s instructions to determine the extra amount to be withheld. Generally, new employees will fill out a W4 form when they first begin at a job. But you can also change your W4 at any time if you change your mind about the withholdings you do or don’t want on each paycheck.

You Can Set Up Extra Withholding for Non-Wage Income

You’ll need to complete a new W-4 every time you start a new job. If your new company forgets to give you one for some reason, be sure to ask. If your employer doesn’t have a W-4 form from you, the IRS requires it to treat you as a single tax filer, which means withholding the highest possible amount from your paycheck for taxes.

The standard deduction is a flat reduction in adjusted gross income that many taxpayers qualify for. The exact amount is determined by someone’s tax-filing status, and certain people, such as those 65 or older, get a higher standard deduction. The standard deduction amounts are adjusted each year to keep up with the pace of inflation.