IRS Form W-4 "Employee's Withholding Certificate"

What Is W-4 Form Used for?

Your employer will ask you to fill out IRS W-4 Form at hire, when you get a new job before the first paycheck is given. The correctly completed form will determine how much tax the employer will withhold from the paycheck. The employer must send the money it withholds from the paycheck to the IRS. If you accurately complete your W-4 tax withholding form, you can have less balance due at tax time and prevent the overpayment of taxes, thus saving more money during the year. If you do not withhold enough tax, you might owe a large sum to the IRS.

IRS W-2 Vs. W-4 Form

IRS Form W-2 is a tax form required by the IRS to report an employee's taxes and annual income. Unlike Form W-4, an input document, Form W-2 is an output document, i.e. it is provided to the employee by the employer to give a summary of gross pay for the year. It contains information on how much money was withheld from the employee's gross pay for deductions, for example, local and state taxes.

How to Fill out W-4 Form?

• You can adjust the withholding if you have multiple jobs or a working spouse to make sure enough tax is withheld;
• There is a possibility to claim exemption from withholding if you had a right to get a refund of all federal income tax withheld because you did not have a tax liability and you expect to receive a refund of all federal income tax;
• If you receive a large amount of nonwage income, for example, dividends or interest, make sure you do not owe additional tax. You can use the calculator at the IRS official website to determine your tax withholding accurately;
• If you are a nonresident alien, before you complete the form, consult with Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens;
• The form includes three worksheets - Personal Allowances Worksheet, Deductions, Adjustments, and Additional Income Worksheet, and Two-Earners/Multiple Jobs Worksheet. You can use them instead of a calculator to determine the number of withholding allowances you need to claim.

W-4 Form Instructions

1. Enter your full name and your social security number;
2. Check the box to show your filing status - single, married, or married, but withhold at a higher single rate;
3. State if your last name differs from the name on the social security card;
4. Write down the total number of allowances you want to claim and the additional amount you want to be withheld from each paycheck;
5. Claim exemption from withholding if you meet the necessary conditions for the exemption;
6. Sign and date the form.

The employer has to write down its name and address, the first date of employment, and the employer identification number (EIN).

IRS W-4 Related Forms:

• IRS Form W-4P, Withholding Certificate for Pension or Annuity Payments is a document used by U.S. citizens, resident aliens, and their estates who receive annuities, pensions, and other deferred compensation. It is necessary to inform the payers of the accurate amount of federal income tax to be withheld from the payments.
• IRS Form W-4V, Voluntary Withholding Request is a document used to ask the payer to withhold federal income tax by individuals who receive social security payments, unemployment compensation, or other dividends and distributions that can be defined as a government payment.
• IRS Form W-4S, Request for Federal Income Tax Withholding from Sick Pay is a document the employee needs to give to the third-party payer of the sick pay, for example, an insurance company if the employee wishes federal income tax withheld from the payments.