30 Apr, 2022

How Do You Fill Out A W4 Form?

How Do You Fill Out a W4 Form?
Written by: - Phil Baker

The W-4 form is a tax withholding form that allows you to determine the amount of income taxes withheld from your paycheck.

The IRS requires employers to withhold federal income taxes and Social Security (FICA) on wages paid to employees. This means that the employer must deduct these amounts from each employee's paychecks before remitting them to the government.

When an employee files their return, they can claim any remaining balance as a refund.

The W-4 also has information for calculating the number of allowances or exemptions claimed by the taxpayer. A taxpayer may be entitled to additional deductions based on his/her marital status, dependents, etc.

So, let's take a look at the W-4 form in more detail.

Also read: How Much Do You Have To Make To File Taxes - The Full Guide

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What Is The Eligibility For A W-4 Form?

An individual who is eligible to file Form 1040 is considered to have earned enough money to owe taxes.

To be eligible to file Form 1099, an individual must earn at least $600 in one year. If he earns more than this amount, then he will need to file Form 1099 with the Internal Revenue Service.

An individual who does not qualify to file Form 1040 because he earns less than $600 per year should use Form 1040NR instead.

Individuals filing Form 1040NR are allowed to make claims for all standard deductions plus the personal exemption.

Also read: How Long Should You Keep Tax Returns For?


The Forms Used

There are two forms used to calculate how much income tax to withhold



Withholding Allowance Certificate. This is a paper form that contains instructions for determining the amount of income tax to withhold. It is usually sent to the employer along with the employee's paycheck.



Information Return for Wage Earners and Self-Employed Persons. This is a paper or electronic form which provides information about the earnings of individuals who do not work for others.


Who Needs A W-4 Form?

Any person who receives taxable income needs to complete a W-4 form. Individuals who receive non-taxable income such as social security benefits, unemployment insurance benefits, alimony, child support, dividends, interest, annuities, pensions, etc., are required to fill out the W-4 form.

Taxpayers who receive both taxable and non-taxable income must complete two separate W-4 forms. A married couple who files jointly must complete one W-4 form for themselves and another W-4 form for their spouse.

A single person who works full time must complete a W-4 for himself. If you are self-employed, you must complete a W-9 form.

If you are employed part-time, you must complete a Part B form. However, you cannot use a W-4 if you are a student.

Individuals who are unemployed or retired must complete a U-8 form.

Also read: Find Out If Political Donations Are Tax Deductible!


How To Complete A W-4 Form

Here are some simple steps to completing a W-4 form:


Step 1 - Determine Your Tax Bracket

Before filling out the W-4, it is important to know where you fall within your tax bracket. Your tax bracket refers to the percentage of your total income that you will pay in taxes.

For example, someone making $50,000 would fall into the 25% tax bracket. This means that they would only be taxed on $25,000 of their income.

To determine your tax bracket, simply divide your gross income (before any deductions) by 100%. For example, if your gross income was $5,000, then you would fall into the 25 percent tax bracket.

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Step 2 - Calculate How Much Income Tax You Owe

Once you know what percentage of your income you will pay in taxes, you can figure out how much income tax you owe.

To find out how much income tax to claim, multiply your adjusted gross income (AGI) by the appropriate tax rate. Example:

AGI $5,000

Tax Rate 25%

X .25 x $5,000 $1,250

Income Tax Owed $1,250


Step 3 - Claim The Amount Of Withheld Taxes

After calculating how much income tax you need to pay, you can claim this amount on the W-4 form by checking the box next to "Claim" and entering the number of withholding allowances claimed.

The IRS allows taxpayers to deduct up to four withholding allowances from their wages. Each allowance reduces your income tax liability by an equal amount.

An individual claiming three withholding allowances has his/her AGI reduced by 75%, 50%, and 25%.

An individual claiming four withholding allowances has his/ her AGI reduced by 90%, 70%, 50%, and 30%.



AG I $2,500

W-4 Claimed Three Withholding Allowances

Wage Deduction Percentage X $2,500 0.75 $375

Deductible Federal Income Tax $375

Amount of Income Tax Paid $0

Another example:

AG In $3,000

W-4 Claimed Four Withholding Allowances

Wage Deduction Percentage X $3,000 0.90 $330

Deductible Federal Income Tax


Total Income Tax Paid $330

Note: you may also choose to file a return without withholding. This is called filing a zero-withholding return.

You should consider filing a zero-withhold return if you expect to have no federal income tax withheld from your paycheck.

However, if you do not expect to have any withholding taken out from your paycheck, you should still fill out the W-4.

When you file a zero-withholding form, you will not get a refund when you file your return.

However, you will receive a credit for any overpayment of tax that you made during the year.

If you received a refund last year, you will probably want to make sure that you have enough money to cover any possible refunds due this year.

Also read: The Guide To Futa Tax Rate 2020

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Final Thoughts

While filling out the W- 4 is easy, there are some things that you should keep in mind.

First, the W-4 does not apply to Social Security or Medicare taxes. These two types of taxes are calculated separately and paid directly to the government.

Second, the W-4 applies to all forms of employment, including self-employment. It does not matter whether you work for yourself or another person.

Finally, it is important to remember that the W-4 is used only as a guide. The actual amount of tax owed varies depending upon many factors such as your marital status, dependents, exemptions, etc.

If you need to generate a paystub, why don't you give our paystub generator a try?


Also read: How Much Do You Understand Tax On Bonuses?

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