Upon starting a new job, one form you will be required to file is the W-4, also known as the Employee’s Withholding Certificate. It’s one of the most important tax documents you will complete, as it informs your employer of the correct amount of federal taxes to withhold from your paycheck.
Learn about other key documents you’ll need to fill out for the 2022 tax season with our new video series.
How to file a W-4 form in 5 Steps
Step 1: Enter your personal information
The first step is filling out your name, address and Social Security number. Make sure your name is as it appears on your Social Security card. The IRS states that if the name you enter on the form is different from the information found on your Social Security card, you will need to contact the Social Security Administration to ensure you receive credit for your earnings.
For your tax filing status, check only one of the three boxes.
- Single or Married Filing Separately.
- Married filing jointly or Qualifying widow(er).
- Head of household (for taxpayers who are single and pay more than half the costs of keeping up their home for themselves and a qualifying individual).
Step 2: Multiple jobs or spouse works
The second step applies only if you have more than one job at the same time or are married filing jointly and you and your spouse both work. If one of these scenarios applies to you, then you have three options:
- Use the IRS’s Tax Withholding Estimator tool which most accurately calculates the additional tax you need to have withheld. Apply these withholdings in step 4C of your W-4.
- Use the IRS’s Multiple Jobs Worksheet, located on page 3 of the W-4 if you and/or your spouse work either two or three jobs at the same time. After filling out the worksheet, enter this amount into 4C on your W-4.
- If you and/or your spouse work a total of only two jobs, you can simply check the box located at 2C of the form (you must also check the box on the W-4 form of your other job as well). By checking the box, your standard deduction and tax brackets will be cut in half for each job to calculate withholding. According to the IRS, this option is somewhat accurate for jobs with similar pay; otherwise, more tax than necessary may be withheld, and this extra amount will be larger the greater the difference in pay is between the two jobs.
Step 3: Claim dependents
If you have dependents, the IRS has a tool that can help you determine who you can claim as a dependent. You can only claim dependents if your income is under $200,000 or under $400,000 if you are married filing jointly.
If you have children under 17 years of age, multiply the number of children you have by $2,000. If, for example, you have three children under 17, enter $6,000 in the first blank. If you have other qualified dependents, you can multiply the number of them by $500. Enter this amount in the second blank of the third section.
Step 4: Factor in additional income and deductions
The fourth step, which is optional, accounts for other adjustments you can make. This step has three parts.
- Other income (not from jobs): You can include other income you receive not related to jobs such as interest, dividends and retirement income.
- Deductions: If you plan to claim itemized deductions (other than standard deductions) to lower your tax liability, fill out the worksheet on page 3.
- Extra withholding: You can withhold additional tax from your paychecks for each pay period, including any amounts from the Multiple Jobs Worksheet. You can designate a specific amount for withholding, like an extra $10 from your paychecks.
Step 5: Sign and file with your employer
Once you’ve reviewed your form and verified that the data you provided is correct, simply sign and date it and return it to your employer.
What to keep in mind when completing your Form W-4
You can change information on your W-4 as needed. If you start a new job and you’re making the same pay, for example, you can check the box on 2C for both of these jobs.
If your household finances change, and you become responsible for paying most of the bills, you can change your status to head of household which entitles you to higher standard deductions resulting in lower tax liability.
What’s more, when you complete your W-4, it doesn’t go to the IRS but instead to your employer who will keep the form on file for at least four years. The IRS, however, reviews withholdings, so it’s important to complete your W-4 form correctly, or you could end up with a higher tax bill.
Claiming exempt
Some taxpayers might also qualify for exempt status. If, for example, you had no tax liability for the previous year, or for this year, you can claim exempt status on your W-4. Doing so indicates to your employer to refrain from withholding any of your pay for federal taxes. If you choose this option, you will have to fill out a W-4 form each year by Feb. 15 (or by the first business day after if the 15th falls on a weekend) to maintain your exempt status.
FAQ about filling out Form W-4
Here are some frequently asked questions about filling out Form W-4.
What should you put on your W-4?
The information you should put on your W-4 depends on how much you would like taken out of your every paycheck and put toward taxes. If you would like to avoid owing taxes at the end of the and potentially racking up a large tax bill, you should use the IRS’ Tax Withholding Estimator tool to determine how much you should have withheld from each paycheck. Make sure to complete the Multiple Jobs Worksheet if applicable. Consider submitting extra withholdings in line 4(c) or decreasing your number of dependents to ensure you are not greeted with a tax bill at the end of the year. Increasing your withholding will make it more likely that you end up with a refund come tax time.
If you got a large refund last year, or are in a situation where you would rather receive all of your money now and pay your taxes at the end of the year, then consider using the W-4 form to reduce your tax burden. You can reduce the amount of taxes taken out of your paycheck by increasing your dependents, reducing the amount of “non-job” income or untaxed income that you are accounting for in your withholding in lines 4(a) or 4(c), or increasing the figure for itemized deductions in line 4(b).
Do you claim 0 or 1 on your W-4?
In previous years, W-4 forms included an option to have taxes automatically taken out of your paycheck or not. This was done by either not claiming an allowance and allowing the full amount of estimated taxes to be taken out of each paycheck by placing a 0 in the appropriate line, or by placing a 1 in the line and then choosing how much you would like withheld from each paycheck.
As of 2021, this section of the W-4 is no longer relevant. The form has changed to use a more comprehensive formula for determining tax withholdings. A W-4 with the 0 or 1 question indicates that your employer is using an outdated W-4 form. However, you can still fill out this form if requested. A 0 will result in more taxes being withheld from each paycheck, while 1 will allow you to take home more money if you choose — though it may result in a tax bill at the end of the year if you withhold too much.
What do you put on W-4 if no taxes are taken out?
In order to qualify for exempt status, you will need to have no tax liability from the previous year and expect to have no tax liability for the current year. If you meet these qualifications, you can inform your employer not to withhold federal income tax from your paycheck by writing “EXEMPT” in line 4(c).
Your employer will still withhold Social Security and Medicare taxes regardless of your exempt status. Also, your exemption will only last for one year. You will have to file a new W-4 claiming exempt status by Feb. 15 of a given year in order to maintain that status.
How do you have more taxes taken out of your paycheck?
In order to have more taxes taken out of your paycheck, indicate on the W-4 that you would like to have your employer withhold more money or update the form with new information that will result in more money being withheld. This can be done by indicating that you have fewer dependents than you did on a previous W-4 filing. You can also submit more withholdings in line 4(c), which will indicate to your employer that you would like them to withhold more than they currently are.
How do you have less tax taken out of your paycheck?
You can use the W-4 form to reduce your tax burden, as well. To do this, decrease the figure that affects your withholdings. That includes additional withholdings indicated in line 4(c), as well as non-job related income identified in form 4(a). You can also submit a new W-4 if you have a new dependent, which will reduce your withholdings.
FAQs
How do you fill out a W4 to get the most taken out? ›
You can choose to have taxes taken out. The amount of taxes taken out is decided by the total number of allowance you claim on line five. By placing a “0” on line 5, you are indicating that you want the most amount of tax taken out of your pay each pay period.
How do I fill out 2021 W4 to have less taxes taken out? ›You can reduce the amount of taxes taken out of your paycheck by increasing your dependents, reducing the amount of “non-job” income or untaxed income that you are accounting for in your withholding in lines 4(a) or 4(c), or increasing the figure for itemized deductions in line 4(b).
How much should I claim on my w4? ›Claiming 1 allowance is typically a good idea if you are single and you only have one job. You should claim 1 allowance if you are married and filing jointly. If you are filing as the head of the household, then you would also claim 1 allowance. You will likely be getting a refund back come tax time.
Is it better to claim 1 or 0 dependents? ›Claiming 1 on your tax return reduces withholdings with each paycheck, which means you make more money on a week-to-week basis. When you claim 0 allowances, the IRS withholds more money each paycheck but you get a larger tax return.
How can I get a bigger refund on my w4? ›To receive a bigger refund, adjust line 4(c) on Form W-4, called "Extra withholding," to increase the federal tax withholding for each paycheck you receive.
How can I get a bigger refund? ›- Select the right filing status.
- Don't overlook dependent care expenses.
- Itemize deductions when possible.
- Contribute to a traditional IRA.
- Max out contributions to a health savings account.
- Claim a credit for energy-efficient home improvements.
- Consult with a new accountant.
Claiming 1 on Your Taxes
Claiming 1 reduces the amount of taxes that are withheld, which means you will get more money each paycheck instead of waiting until your tax refund. You could also still get a small refund while having a larger paycheck if you claim 1. It just depends on your situation.
It all comes down to how many "allowances" you claim. The more allowances you claim on your W-4, the less income tax will be withheld. If you claim zero allowances, you will have the most tax taken out. Most people fill out their W-4 when they first start a job and never think about it again.
Is it better to have more or less deductions on W4? ›When you have too much money withheld from your paychecks, you end up giving Uncle Sam an interest-free loan (and getting a tax refund). On the other hand, having too little withheld from your paychecks could mean an unexpected tax bill or even a penalty for underpayment.
How many exemptions should I claim? ›If you are single and have one job, or married and filing jointly then claiming one allowance makes the most sense. An individual can claim two allowances if they are single and have more than one job, or are married and are filing taxes separately.
How do I figure out how many withholding allowances? ›
Compare the adjusted wage amount to the appropriate wage bracket table in IRS Publication 15-T, and record it as the tentative withholding amount. Divide the amount specified in Step 3 of your employee's Form W-4 by your annual number of pay periods. Subtract this amount from the tentative withholding amount.
How much is a w4 allowance worth 2021? ›The 2021 amount for one withholding allowance on an annual basis is $4,300. calculates all employees on the annual withholding table (IE.
Can you max out federal withholding? ›Not all gross wages are subject to this tax. An annual wage base limit caps earnings that are subject to withholding for Social Security at $147,000 in 2022, increasing to $160,200 in 2023. 4 Income over this amount isn't subject to Social Security tax or withholding.
Is it good to claim yourself on w4? ›“Should I Declare Myself Exempt from Withholding?” No, it's not a good idea to claim you're exempt simply in order to get a bigger paycheck. By certifying that you are exempt, the employer would not withhold any federal income tax amounts during the year, and that would result in a large tax bill due in April.
Can I claim myself as a dependent? ›If you don't meet the qualifications to be a qualifying child or qualifying relative, you may be able to claim yourself as a dependent. Think of a personal exemption as “claiming yourself.” You are not your own dependent, but you can potentially claim a personal exemption.
How can I get a big tax refund with no dependents? ›- Author: Tanya Rivera.
- Published: 4:47 PM EDT March 22, 2022.
- Updated: 5:07 PM EDT March 22, 2022.
Claiming fewer allowances on Form w-4 will result in more tax being withheld from your paychecks and less take-home pay. This might result in a larger tax refund. On the other hand, claiming too many allowances could mean that not enough tax is withheld during the year.
Does claiming 0 mean more money? ›Claiming more allowances will lower the amount of income tax that's taken out of your check. Conversely, if the total number of allowances you're claiming is zero, that means you'll have the most income tax withheld from your take-home pay.
How to get a $10,000 tax refund? ›Individuals who are eligible for the Earned Income Tax Credit (EITC) and the California Earned Income Tax Credit (CalEITC) may be able to receive a refund of more than $10,000. “If you are low-to-moderate income and worked, you may be eligible for the Federal and State of California Earned Income Tax Credits (EITC).
What is the biggest tax refund ever? ›Ramon Christopher Blanchett, of Tampa, Florida, and self-described freelancer, managed to scoop up a $980,000 tax refund after submitting his self-prepared 2016 tax return. He also allegedly claimed that he earned a total of $18,497 in wages — and that he had withheld $1 million in income taxes, according to a Jan.
Does claiming dependents increase paycheck? ›
The more dependents you claim, the less income will be withheld (bigger paycheck), and by contrast, if you claim zero dependents, you will have the most tax taken out (smaller paycheck).
How do you qualify for a refund? ›You get a refund if you overpaid your taxes the year before. This can happen if your employer withholds too much from your paychecks (based on the information you provided on your W-4). If you're self-employed, you may get a refund if you overpaid your estimated quarterly taxes.
How much does a single person usually get back in taxes? ›The average individual income tax refund was $3,039 for the 2021 tax-filing year, a 7.5% increase from 2020 when the average refund was $2,827.
How do I know if enough taxes are being withheld? ›Use the Tax Withholding Estimator on IRS.gov. The Tax Withholding Estimator works for most employees by helping them determine whether they need to give their employer a new Form W-4. They can use their results from the estimator to help fill out the form and adjust their income tax withholding.
What happens if I don't claim all of my income? ›The IRP allows agents to match income reported on third-party information returns against the income reported by you. If they find that you underreported your income, the IRS begins the collections process. First, they send you a letter to inform you they found a discrepancy and that you may have unpaid taxes.
What happens if I owe taxes and don't have enough money? ›If you find that you cannot pay the full amount by the filing deadline, you should file your return and pay as much as you can by the due date. To see if you qualify for an installment payment plan, attach a Form 9465, “Installment Agreement Request,” to the front of your tax return.
How do I maximize my take home pay? ›- Adjust your tax withholding. ...
- Do the math. ...
- Update your 401(k) contributions. ...
- Employee benefits. ...
- Revisit your paycheck deductions.
If you are single and do not have any children, as well as don't have anyone else claiming you as a dependent, then you should claim a maximum of 1 allowance. If you are single and someone is claiming you as a dependent, such as your parent, then you can claim 0 allowances.
What happens if no federal taxes are taken out of my paycheck? ›Your employer might have just made a mistake. If your employer didn't withhold the correct amount of federal tax, contact your employer to have the correct amount withheld for the future. When you file your return, you'll owe the amounts your employer should have withheld during the year as unpaid taxes.
What happens if you claim too many exemptions? ›If you claim more allowances than you are entitled to, you are likely to owe money at tax time. If claiming too many allowances results in you significantly underpaying your taxes during the course of the year, you may have to pay a penalty when you file your annual tax return.
Do you count yourself as a withholding allowance? ›
W4 Allowances
You claim one allowance for yourself if you're being claimed as a dependent on anyone else's tax return. You then add more allowances as you go down a list of conditions. For example, if you're single with only one job, or married with a non-working spouse, you add another allowance.
How much is an allowance worth? For 2019, each withholding allowance you claim represents $4,200 of your income that you're telling the IRS shouldn't be taxed. Keep in mind that you still need to settle up your tax liability at the end of the year by filing your tax return.
Is there a penalty for too much withholding? ›Is There a Penalty for Overwithholding Taxes? No, the IRS will not charge you a penalty if you pay more tax than was necessary. You will need to file a tax return to request a refund of the money you overpaid.
Can I withhold 100% for taxes? ›Two things to keep in mind
Second, if you discover at the end of the year that you haven't had enough money withheld, you can always do a final year-end distribution with 100% withholding. You won't receive cash, but you'll get credit for the withholding, which could help you avoid penalties at the last minute.
The federal withholding tax has seven rates for 2021: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The federal withholding tax rate an employee owes depends on their income level and filing status. This all depends on whether you're filing as single, married jointly or married separately, or head of household.
Did w4 forms Change 2021? ›The new 2021 Form W-4 remains relatively unchanged after a major overhaul in December 2019. The only notable updates include a few adjustments to taxable wage & salary tables on page 4. For employers, this means that current employees won't face a learning curve when updating withholdings.
Did w4 change in 2021? ›How the W-4 form changed. The Form W-4 is now a full page instead of a half page, and yet it's still easier to understand. For starters, a lot of the basics have stayed the same. You still have to provide your name, address, filing status and Social Security number.
Is w4 different in 2021? ›Should I use the 2020 or 2021 version of the W-4? While the major overhaul of the W-4 was released in 2020, there are no format changes between the 2020 W-4 and the 2021 W-4. The only noticeable differences are minor adjustments made to the taxable wage and salary tables on page 4.
How many dependents should I claim on W4? ›You can claim anywhere between 0 and 3 allowances on the W4 IRS form, depending on what you're eligible for. Generally, the more allowances you claim, the less tax will be withheld from each paycheck. The fewer allowances claimed, the larger withholding amount, which may result in a refund.
Can I claim myself as a dependent on W4? ›As long as you qualify, you yourself can be claimed as a dependent, even if you paid your own taxes and filed a tax return. But dependents can't claim someone else as a dependent. If you and your spouse file joint tax returns, and one of you can be claimed as a dependent, neither of you can claim any dependents.
How do I know how much federal tax I have to withhold? ›
Use the Tax Withholding Estimator on IRS.gov. The Tax Withholding Estimator works for most employees by helping them determine whether they need to give their employer a new Form W-4. They can use their results from the estimator to help fill out the form and adjust their income tax withholding.
How many allowances should I claim if I'm single? ›Single. If you are single and do not have any children, as well as don't have anyone else claiming you as a dependent, then you should claim a maximum of 1 allowance.
Can you claim allowances on the 2021 w4? ›But unlike 2019 and earlier versions, the new form did away with withholding allowances. Employees can no longer claim withholding allowances to lower their federal income tax withheld.