Form W-4: What It Is and How to File

Form W-4 determines how much tax will be withheld from your pay

What Is Form W-4: Employee's Withholding Certificate?

When you start a new job, you will complete Form W-4, Employee's Withholding Certificate. This form determines how much tax your employer will withhold from your paycheck. The amount withheld is paid to the Internal Revenue Service (IRS) using your name and Social Security Number. When you file your annual tax return, you will be credited with the tax amount paid from your paycheck throughout the year.

Key Takeaways

  • Employees fill out a W-4 form to inform employers how much tax to withhold from their paychecks.
  • The amount withheld is based on filing status, dependents, anticipated tax credits, and deductions.
  • If the form is filled out incorrectly, you may not pay enough income tax throughout the year.
  • Employees can change their withholding by submitting a new W-4 to their employer.
  • A new W-4 must be completed with each new employer.
Human Fills out the W-4 Tax Form


Maksim Shchur / Getty Images

Understanding Form W-4: Employee's Withholding Certificate

You need to complete a W-4 correctly because the IRS requires workers to pay taxes on their income throughout the year. If you fail to withhold enough tax, you could owe a large sum plus interest and penalties for underpaying your taxes to the IRS when you file your tax return.

If you withhold too much tax during the year, your monthly income will be reduced, and you won’t get your excess tax back until you file your tax return and receive a refund.

You fill out a new W-4 form if you start a new job or change the amount withheld from your pay.

How to Fill Out Form W-4

If you are single, have a spouse who does not work, do not have dependents, have income from one job, and do not claim tax credits or itemize deductions on your tax return, filling out a W-4 is easy. Just provide your name, address, Social Security number, and filing status, and your withholding will be computed based on your standard deduction and tax rates.

You can increase your withholding using Form W-4 if you hold more than one job, both you and your spouse work, or have income from other sources that are not subject to withholding.

You can also decrease your withholding if you are eligible for income tax credits such as the child tax credit or credit for other dependents, or you are eligible for deductions other than the basic standard deduction, such as itemized deductions, the deduction for IRA contributions, or the deduction for student loan interest.

If you don’t submit Form W-4, the IRS requires your employer to withhold your wages as though you were single without other adjustments.

2023 IRS FORM W-4

Estimating Your Income Taxes

The IRS recommends using its online Tax Withholding Estimator to calculate the correct amount withheld from your pay. Employers use IRS Publication 15-T to determine how much federal income tax to withhold from employees' paychecks.

Using Form W-4, you can instruct your employer to withhold an additional sum to support other income sources such as self-employment pay, interest, dividends, or retirement income.

You can also use Form W-4 to prevent your employer from withholding any money from your paycheck, but only if you are legally exempt from withholding because you had no tax liability for the previous year and expect no tax liability for the current year.

Revising Form W-4

You may need to submit a revised W-4 if your situation changes, such as getting married or divorced, having a child, or picking up a second job. You can also submit a new W-4 form if you discover that you withheld too much or too little tax from the previous year.

What Is a W-4?

Form W-4, the Employee's Withholding Certificate, is filled out by an employee to instruct the employer how much to withhold from your paycheck. The IRS requires that individuals pay income taxes gradually throughout the year.

What Happens if I Begin a Job in the Middle of the Year?

If you start a job in the middle of the year and will be employed no more than 245 days for the year, request that your employer use the part-year method to compute your withholding. The basic withholding formula assumes full-year employment, and you’ll have too much withheld and have to wait until tax time to get the money back.

How Do I Fill Out a New W-4 Form?

If you are single, have a spouse who does not work, do not have any dependents, only have income from one job, and do not claim tax credits, provide your name, address, Social Security Number, and filing status, and sign and date the form. The IRS has an online Tax Withholding Estimator to help you determine the amount to be withheld from your pay.

What Is the Difference Between a W-2 and a W-4?

The W-4 tells the employer how much to withhold from the employee. The W-2 tells the IRS what the employee earned in the previous year. Small business owners and large businesses are required to submit Form W-2. Every employee must file a W-4.

The Bottom Line

Your employer should provide a W-4 form when you are hired. Take the time to fill out your W-4 correctly. You'll avoid penalties at tax time and will keep as much of your earnings as possible throughout the year.

Article Sources
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  1. Internal Revenue Service. "About Form W-4, Employee's Withholding Certificate."

  2. Internal Revenue Service. "Topic No. 306 Penalty for Underpayment of Estimated Tax."

  3. Internal Revenue Service. "FAQs on the Form W-4."

  4. Internal Revenue Service. "Topic No. 753 Form W-4 – Employee's Withholding Allowance Certificate."

  5. Internal Revenue Service. "2023 Form W-4," Page 2.

  6. Internal Revenue Service. "Publication 505, Tax Withholding and Estimated Tax."

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