How to Maximize Your Tax Return With a W-4

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Maximize your refund by increasing the amount of taxes withheld from your paycheck.
Maximize your refund by increasing the amount of taxes withheld from your paycheck. (Image: tax forms image by Chad McDermott from Fotolia.com)

When you begin a new job, your employer presents you with Form W-4, an Internal Revenue Service form used by employers to calculate the appropriate amount of income tax to withhold from an employee's paycheck. It is your responsibility to ensure an adequate amount of income tax is withheld from your paycheck to cover the cost of income tax owed to the IRS. If you pay too much tax, you will receive this amount as a refund on your income tax return. Having additional amounts of income tax withheld from your paycheck will result in a larger tax refund.

Obtain Form W-4 from your employer. If you are not a new employee, request your withholding status and the amount of exemptions currently being withheld from your paycheck. There are three types of withholding status: Single, Married and Married, but withhold at higher single rate.

Complete the top portion of Form W-4 to determine your amount of exemptions. Include an exemption for yourself, your spouse and all dependents. Enter your final calculation in line H.

Enter your personal information in Form W-4 and determine your filing status. If you are currently claiming Married, select "Married, but withhold at higher single rate." If you are not married, select "Single." Claiming Single instructs your employer to withhold the maximum amount of tax from your paycheck.

Enter the amount of withholdings from line H in line 5. To have an additional amount of tax withheld from your paycheck, enter a fewer number of dependents than the number entered in line H. If line H states three exemptions, enter "1" or "0" in line 5. This increases the amount of income tax withheld from your paycheck. If you are not a new employee, reduce the amount of your current withholdings.

Enter an amount for additional withholdings in line 6. This is an additional dollar amount to be withheld from each paycheck. Consider entering $15 or $20. Place a line through line 7. Line 7 is used for tax-exempt employees who wish to have no income tax withheld from their paycheck.

Sign and date the form. Return Form W-4 to your employer.

Tips & Warnings

  • If you are a current employee and discover that you are claiming "Single" or "Married, but at a higher Single rate," make sure to enter an amount in line 6. The maximum amount of income tax is already withheld from your paycheck.

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