What Is a W-4 Form?

What Is a W-4 Form?

Let me explain what a W-4 form is. It's an Internal Revenue Service (IRS) tax form that you, as an employee, fill out to tell your employer about your tax situation. This form instructs your employer on how much tax to withhold from your paycheck, considering your marital status, the number of allowances and dependents you have, and other relevant factors. You might also hear it called the Employee's Withholding Allowance Certificate.

Understanding the W-4 Form

When you fill out the W-4 form, you complete seven lines. The initial lines cover basics like your name, address, and Social Security number. There's a worksheet that comes with the form to help you estimate your allowances for tax withholding. Remember, claiming more allowances means less money gets withheld from your paycheck. You can even claim an exemption from any withholding if you had no tax liability last year and expect none this year.

The worksheet starts by allowing you to add one allowance if no one else can claim you as a dependent on their tax return. You can take another if you're single with one job, or married with one job where your spouse doesn't work, or if wages from a second family job are under $1,500.

It's important to note that starting January 1, 2018, the personal exemption federal tax break was suspended until January 1, 2026, due to the Tax Cuts and Jobs Act.

On line E for the child tax credit, you can claim allowances for each eligible child, depending on your income and the number of children. Line F covers credits for other dependents you'll claim on your tax return—check IRS Publication 501 for who qualifies, and be aware of income limits.

If you're applying for other credits like the earned income credit (EITC), use line G. Refer to Worksheets 1-6 in IRS Publication 505 to see if you qualify for extra allowances. Finally, on line H, add up all the previous lines and enter the total.

The worksheet includes additional pages for complex situations, such as if you itemize deductions instead of taking the standard deduction. Your employer then uses the allowances you calculated to determine paycheck withholding, and that money goes to the IRS after each pay period.

Special Considerations for the W-4 Form

You can file a new W-4 at any time, and you should do so when your situation changes—like marriage, divorce, having a child, or a dependent's death. Such changes can affect whether more or less tax is withheld. Also, the elimination of the personal exemption for tax years 2018 through 2025 might alter the allowances you should claim.