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Step 1
Examine the W-4 form. There are worksheets included to help you determine the right amount of exemption withholdings. You must include personal information on the form for your employer to use, such as name, address and social security number.
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Step 2
Look over your most recent paycheck stub. Extract key pieces of information to determine the right amount of withholding for your taxes. Calculate your gross salary per pay period, non-taxable benefits, number of pay periods in a year and the expected tax amount (use last year's as an example).
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Step 3
Fill out the information required by the W-4 form including the number of exemptions. Sometimes, the true number of exemptions requires you to pay a large amount of taxes. You must adjust the number of exemptions, occasionally, when withholdings numbers are off.
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Step 4
Try not to let a large refund lure you into taking too few exemptions either. You don't need to loan the federal government your money interest free. You should be OK if you just calculate and use the correct number of exemptions on your W-4 for your situation.
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Step 5
Recalculate your withholding if your previous year's return gave you a big return or a heavy amount to pay. The IRS will levy a fine against you if you over or under figure your exemptions and cause a large over-payment or under-payment of your taxes.
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Step 6
Write "exempt" on the W-4 if you make lower income wages. The payroll department can calculate withholdings from there. You may be eligible for an earned income credit designation.
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Step 7
Make sure you sign and date the form before giving it to your employer. Do not fill out lines 8-10. Save these for the payroll department.
