what is a w4

A W-4 is an Internal Revenue Service (IRS) tax form completed by an employee in the United States to indicate his or her tax situation to the employer. The W-4 form tells the employer the correct amount of federal tax to withhold from an employees paycheck. The W-4 is based on the idea of "allowances"; the more allowances claimed, the less money the employer withholds for tax purposes. An employee may claim allowances for oneself, ones spouse, and any dependents, along with other miscellaneous reasons, such as being single with only one job. The W-4 Form includes a series of worksheets for calculating the number of allowances to claim. One must provide some personal information and report the total allowances and additional withholding amounts on the actual form. The employee must tear off this certificate and hand it to their employer. One may request an exemption from employer withholding (of income, but not payroll tax) if one had no income tax in the previous year and does not expect to owe any taxes in the current year. The W-4 Form itself does not indicate that anticipated losses can also be taken into account.