A W-4 form, officially called the "Employee's Withholding Certificate," is an IRS tax document that employees in the United States complete and submit to their employer. Its purpose is to inform the employer about the employee's tax situation so the employer can withhold the correct amount of federal income tax from the employee's paycheck throughout the year
. Key points about the W-4 form include:
- It determines how much federal income tax should be withheld from your wages and sent to the IRS
- Employees fill out a W-4 when starting a new job or when their tax situation changes
- The form includes personal information such as filing status, number of jobs, dependents, and anticipated deductions or credits, which help calculate withholding
- Accurate completion helps avoid overpaying taxes during the year or owing a large balance at tax time
- If you do not submit a W-4, your employer must withhold taxes as if you are single with no adjustments, which could lead to higher withholding than necessary
- The form no longer uses withholding allowances as it did before 2020; instead, it asks for specific information about dependents and deductions
In summary, the W-4 form is essential for ensuring that the right amount of federal income tax is withheld from your paycheck, helping you manage your tax payments efficiently throughout the year
