How to Fill Out a W-4 for Computing Taxes
When you are hired for a job, your employer needs to know how much to withhold from your pay for taxes. The Internal Revenue Service requires that employers have new hires complete a W-4 form for the purpose. On the W-4, you state withholding conditions, including your filing status, allowances, exempt status, or additional tax to be withheld from each paycheck. Your employer uses your W-4 and the federal withholding tax tables from IRS Circular E to compute your federal income tax withholding. Complete the form carefully to ensure your withholding is correct.
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Instructions
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Fill out the Personal Allowances Worksheet. Claim your allowances on lines A through G of the worksheet. The IRS allows you a specific sum for each allowance you claim on your W-4. This sum lowers your taxable income. For example, you claim an allowance for yourself on line A if no one else can claim you as a dependent. On line D of the worksheet, you claim an allowance for each dependent you will claim on your federal income tax return.
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Tally your allowances from lines A through G, and put the total on line H. Keep this worksheet for your records.
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Use the information on the Personal Allowances Worksheet to fill out the Employee's Withholding Allowance Certificate (the W-4 form itself). Put your name, Social Security number, home address, and filing status on lines 1 through 3, respectively. On line 5, state the total number of allowances you claimed on line H of the Personal Allowances Worksheet. State any additional amount you want withheld on line 6. Your employer will add this amount to your federal income tax withholding determined from the Circular E withholding tax table.
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Write "exempt" on line 7 if you meet the requirements to exempt yourself. For 2010, you are exempt if in the last year your withholding was refunded to you because you owed no taxes, and in the current year you do not expect to owe any taxes.
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Sign and date the W-4, and give it to your employer.
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Complete the Deductions and Adjustments Worksheet only if you expect to itemize your deductions, such as charitable contributions and home-mortgage interest, and claim specific credits or income adjustments, such as child and dependent care expense. Use IRS Publication 919 -- see Worksheet 6 in the 2010 version -- to determine the credit and adjustment amounts to include on the W-4.
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Fill out the Two Earners/Multiple Jobs Worksheet if you and your spouse are both employed and your combined earnings are more than $32,000 (for 2010), or if you have multiple jobs and the combined earnings from all your jobs is more than $18,000 (for 2010).
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Tips & Warnings
If you don't submit a W-4 to your employer, the employer can withhold at the rate for a single person with zero allowances -- the highest tax bracket.
The IRS withholding calculator can help you to determine whether you need to submit a new W-4 to your employer. It can also help you avoid underpaying or overpaying federal income tax.
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