How To Fill Out Your W-4 Form

Learn about the changes made to the W-4 and how to complete it

Employer showing new employee paperwork to fill out
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The Internal Revenue Service (IRS) tends to tweak its tax forms occasionally, and did so with Form W-4 in tax year 2020 to make it easier for taxpayers to complete.

With the updated Form W-4, the IRS replaced many of its complex worksheets with questions. And the answers you provide are intended to guide you to enter the best information for your personal situation. Below, we’ll go over the changes and how to fill out the W-4. 

Key Takeaways

  • The IRS redesigned Form W-4 for tax year 2020 and going forward. You’ll have to complete this version of the form if you begin a new job or want to make changes to your withholding. 
  • The new form is simpler to complete and it includes two worksheets to help you get your withholding as close to perfect as possible.
  • You could end up having more money withheld than necessary if you work more than one job or you’re married and your spouse works. You can adjust for this on your Form W-4.
  • You may want to submit a new form to your employer if you experience a major life change that could affect the amount of income tax you'll likely owe at the end of the tax year.

What Is the W-4 Form?

A W-4 form is provided by the IRS and lets your employer know how much to withhold from your pay each pay period based on withholding tables provided by the IRS. The idea is to get your withholding just right so you don't owe a fortune in taxes at the end of the year or receive an unusually high refund. This could occur because had too much withheld so the IRS held onto the excess all year and is now returning that money to you—without interest. 

Perhaps the most significant change to the form is the removal of certain allowances for additional income, deductions, and tax credits, which previously determined the amount of your withholding. However, because of the 2017 Tax Cuts and Jobs Act, personal exemptions were eliminated from the tax code, and allowances and exemptions went hand-in-hand. 

Despite the changes, your employer will still forward the withheld income tax to the IRS on your behalf on a pay-as-you-go basis so you won't be left in the dark about the amounts being withheld. 

Many employers will include the information on your pay stubs, and you’ll receive a Form W-2 after the close of the tax year, showing you the totals so you can enter this information on your tax return. 

5 Steps To Filling Out Your W-4

The 2022 Form W-4 includes five steps on the first page, followed by a page of instructions then two pages of worksheets. Only Steps 1 and 5 are required to be filled out. Steps 2 through 4 are dedicated to extra information that might affect the amount of your withholding in certain situations.

Your withholding will be based solely on the standard deduction for your filing status and the tax rates that apply to your income if you don’t provide extra information in steps 2 through 4.  

Step 1: Enter Personal Information

The first step is fairly straightforward. This is where you enter your name, address, and Social Security number. The only tricky part might be indicating your filing status. You’ll need some knowledge of what each implies and which you qualify for. You have three choices here at 1(c):

  • Single or married and filing a separate return
  • Married and filing a joint return or qualifying widow(er)
  • Head of household

You must be unmarried, have at least one dependent, and pay for more than half your household expenses to qualify for the advantageous head of household status.Check with a tax professional if you think you might qualify. 

Step 2: Multiple Jobs or Spouse Works

You only need to complete Step 2 if either of these circumstances applies to you: 

  1. You hold down two or more jobs
  2. You’re married, your spouse works, and you intend to file a joint tax return.  

The IRS suggests that you use its withholding estimator provided online to calculate the most accurate withholding amount in these situations. Or you can use the worksheet on page 3, but the IRS says that you shouldn’t do both. The result of either option is carried forward to Step 4. 

Check the box at 4(c) if there are only two jobs involved here: You work two jobs, or you and your spouse each work one job. This indicates to your employer that the usual withholding for your filing status should be cut in half, and it generally results in close-to-accurate withholding only if all jobs pay about the same. 

Make sure box 4(c) is checked on all W-4 forms given to all other employers. 

Step 3: Claim Dependents  

This is where you tell your employer how many dependents you’re supporting. More dependents can mean less withholding if you’ll be claiming the child tax credit or the credit for other dependents on your tax return. 

Multiply your number of qualifying dependents by the appropriate dollar amount shown on each line and enter the total so your employer can accommodate this information when calculating your withholding. You can skip this section if you have no dependents. 

Step 4: Other Adjustments 

This section allows your employer to adjust for three other situations that might affect your withholding amount. You can enter dollar figures in 4(a), 4(b), and/or 4(c) if you want more or less withheld from your pay under three circumstances. 

4(a): Use 4(a) if you want your employer to withhold extra because you have other sources of income (not jobs as an employee) from which taxes aren’t withheld. Think investment income or retirement benefits. Enter the amount of income you receive from these sources.  

4(b): Use 4(b) to line up your withholding to reflect tax deductions other than the standard deduction that you intend to claim when you file your tax return. Maybe you’re planning to itemize instead, or you’re eligible to claim “above the line” deductions for things like student loan interest or certain retirement contributions. You should have less withheld from your pay in this situation to accommodate these expenses that will shave dollars off your taxable income when you prepare your return. 

The IRS provides a deductions worksheet on page 3 to guide you. Use it to calculate how much you should enter at 4(b) for the most accurate result.

4(c): You can ask your employer to withhold extra money at 4(c) with no explanation as to why you want to do so. Just enter how much additional money you would like withheld pay per pay period. You might want to do this if you earn money on the side that’s not subject to withholding, maybe as an independent contractor, and you'd rather that your employer wasn't privy to this information.

You can also claim an exemption from withholding entirely in this section if you qualify. Just write “EXEMPT” in the empty space at the end of this section that appears below 4(c). You won’t be considered exempt if you enter the word at any other place on the form. 

You must complete and submit a new Form W-4 by Feb. 15 of each year to continue claiming an exemption from withholding. It doesn’t roll over from one year to the next if you don’t take this step.

Step 5: Sign Here

This marks your final step. Sign and date the form where indicated and submit it to your employer.

Things To Consider When Filling Out Your W-4

Various other factors can affect the correct amount of withholding from your pay, and you’ll want to keep them in mind when you’re completing your Form W-4. Using the IRS withholding estimator is recommended for these situations as well:

  • You don’t plan to work throughout the entire year, or you’re entering a new job toward the end of the year and you weren’t employed before.
  • You received a surprisingly high tax refund last year or you owed the IRS a considerable amount when you filed your tax return. Both could indicate that your existing Form W-4 isn’t correct.
  • You don’t want your employer to know that you’re working a side gig. You just want to enter extra withholding at 4(c) without explaining why. 

To Withhold or Not To Withhold

The current Form W-4 gives you a great deal of control over how much in the way of taxes is withheld from your pay. You might be tempted to take advantage of this and cut back on your withholding because you’re laboring under heavy monthly expenses and you need every dime. Think carefully before you take this route.

First, you can only claim a total exemption from withholding if you owed no federal tax last year and you don’t expect to owe anything in 2022, either. Otherwise, you may owe the IRS a hefty tax payment after year’s end if you claim to be exempt but you don’t meet these rules.You may owe a financial penalty as well. 

You can find your tax liability for the previous year on line 24 of your 2021 Form 1040. Compare what you expect to earn in 2022 with the standard deduction for your filing status this year. You’re not exempt if your earnings will be more. 

Second, completing your Form W-4 in such a way that it minimizes your withholding can present a big problem at tax time. The IRS is going to want all that money that you didn’t have withheld in a lump sum when you file your return. Not having those taxes withheld doesn’t mean you won’t ultimately owe them. It’s probably a lot less painful to pay a little toward your tax bill each pay period through withholding. 

When To Fill Out a New W-4 Form

You don’t have to fill out a new W-4 simply because the IRS redesigned the form, at least not if you’re still at the same job. Your employer will continue using your pre-2020 Form W-4 to calculate your withholding in this case. But you might want to do so in a few situations: 

  • You experience a major life change such as getting married, having a child, losing a dependent, going back to school, or buying a home. 
  • You take on an additional job or a side gig that might warrant adjusting your withholding on a new Form W-4. 
  • You stop working an additional job, or your spouse does. 
  • You begin collecting some form of retirement benefits in addition to your salary or wages. 

Frequently Asked Questions (FAQs)

Should I claim 1 or 0 on my W-4 Form?

You can no longer claim allowances like 1 or 0 on your W-4 since the IRS redesigned the form. However, you can claim an exemption from withholding if you owed no income tax last year and don’t expect to owe anything in the current year. Be warned, however: You could owe a very hefty tax bill to the IRS when you file your return if you don’t meet these qualifying rules, and you may be charged penalties as well. 

Does being a student impact my W-4 Form?

Simply being a student doesn’t exempt you from taxation, although you may be exempt from withholding if you have negligible or no earnings. And filling out a W-4 and giving it to your employer might result in a few nice tax credits and deductions. You can account for these and adjust your withholding accordingly. 

Does being a student impact my W-4 Form?

Simply being a student doesn’t exempt you from taxation, although you may be exempt from withholding if you have negligible or no earnings. And filling out a W-4 and giving it to your employer might result in a few nice tax credits and deductions. You can account for these and adjust your withholding accordingly. 

Where do I get a W-4 Form?

Your employer will give you a Form W-4 to complete when you begin a new job. You can simply ask for one if you want to make changes to the one you already have on file with the company.

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