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Form W-4 - Tax Forms - 1099 and W2 IRS Tax Forms | Buy Tax Forms

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Form W-4

The W-4 is another one of the IRS forms that must be completed so your employer knows how much money they should hold from your checks for federal taxes. If you complete the form correctly you can be confident knowing that you will not have to pay a lot back when tax time rolls around. Not to mention the fact that it also helps you avoid paying too much in taxes which in return helps you receive the maximum amount of money during the year.

Form W-4 Allowances

The W-4 idea was created with “allowances” in mind. The more of them that you claim the less money your employer will be able to take away from your check when it comes to taxes. You will be allowed one for yourself, one for your spouse, and one for each of the additional dependents that you list on your tax return. Additionally, you are also allowed to claim additional allowances in specific cases such as filing as the head of household or if you qualify for a tax credit for child care expenses.

Additional Withholding - The W-4 also serves the purpose of helping you learn whether or not extra money needs to be withheld from your checks. If you work multiple jobs, work self – employed, or have a spouse that is in the workforce to you will find that the personal allowance section from the W-4 form will not withhold enough money. The reasoning behind this is due to the fact that your income will be in a higher tax bracket. However, when you volunteer to increase your tax withholding on the W-4 form you are making it so you can avoid having to make a higher tax payment when it is time for you to file your taxes.

Filing Form W-4

The W-4 form is more formally known as the Employee’s Withholding Allowance Certificate which includes a variety of worksheets that serve the purpose of helping you when you are trying to calculate the number of allowances that you should claim. Furthermore, in these worksheets you will find a separate worksheet f or those who have a working partner or earn additional income outside of their main form of income. Once you have determined your allowances you will be asked to fill in some personal information and report the additional withholding amounts on the actual W-4 form. This is what you must tear off and give to your employer.

Exemption - The W-4 form also holds an additional purpose which is to exempt yourself from withholdings. What this basically means is you will receive your full pay check without have any federal income taxes taken out. However, the only people who qualify for exemption are the ones who had no income tax liability the previous year and are not expected to have to owe any taxes in the current year either. An example of this would be someone who is a single tax payer making $8000 annually. They would not owe any federal income taxes because of the personal exemption and standard deduction that can be claimed on the tax return which makes it impossible for them to owe taxes on their $8000.

Updating the W-4 Form - The IRS states that if a person works more than one job or has a spouse that is in the workforce they should claim all of the allowances on the W-4 for the highest paying job and avoid claiming any on the other W-4 forms for their other places of work. Furthermore, they suggest that anytime a major event occurs such as marriage, losing a job, having a child or adopting a child, and gaining new employment to fill out a new W-4 form. All of these things play a part in how much you will end up owing in taxes so it is important to update your W-4 form appropriately.

 

 

 
 
 
 

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