If you had to pay a large tax bill or got a big refund this year, that might be a sign to review your W-4. Once you complete the form, don’t send it to the IRS — just give it to your payroll or human resources department to file. In contrast, if you have too little tax withheld, you could face a large tax bill when you file.

These graphs are separated out by filing status, so you’ll need to select the correct graph based on how you file your taxes. The left-hand column lists dollar amounts for the higher-earning spouse, and the top row lists dollar amounts for the lower-earning spouse. This involves completing Step 2 for income from their second job and Step 3 for their primary job’s filing status.

Step 2: Multiple jobs or spouse works

While these updates don’t drastically alter the form’s structure, they significantly enhance the precision of tax withholding, prompting employees to utilize provided worksheets for accurate calculations. The IRS recommends regular review and withholding adjustment, especially during significant financial changes or when starting a new job, to ensure compliance with tax obligations. Line 1 of the multiple jobs worksheet (Two jobs) can be used if you either have two jobs or you’re married filing jointly, and your spouse also has a job. On this line, you’re going to refer to the schedule below from Page 4 that will provide you with a value to enter on this line that blends the higher paying job and a lower paying job.

This can be done by indicating that you have fewer dependents than you did on a previous W-4 filing. You can also submit more withholdings in line 4(c), which will indicate to your employer that how to fill out a w4 for dummies you would like them to withhold more than they currently are. Upon starting a new job, one form you will be required to file is the W-4, also known as the Employee’s Withholding Certificate.

Ugh, Chris—you’re being boring again! Why do I even care about tax stuff?

You need the information on a W-2 to accurately fill out a tax return. A W-2, on the other hand, is a report your employer gives you by the end of January each year. A W-4 form, or “Employee’s Withholding Certificate,” is an IRS tax document that employees fill out and submit to their employers. Employers use the information on a W-4 to calculate how much tax to withhold from an employee’s paycheck throughout the year. Using a Tax Calculator, like the one provided by TaxAct, adds an extra layer of precision to this process.

• When you submit a W-4, you can expect the information to go into effect fairly quickly.
• Securities and Exchange Commission as an investment adviser.
• The information is accurate as of the publish date, but always check the provider’s website for the most current information.
• The current version of the W-4 form eliminates the option to claim personal allowances.
• The IRS released an updated version of Form W-4 for 2024, which can be used to adjust withholdings on income earned in 2024.

Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations. So your employer knows how much tax to withhold from each paycheck. Your employer sends the withheld amount to the IRS on your behalf, and at the end of the year, your employer will send you a W-2 showing (among other things) how much it withheld for you that year. Those who don’t pay taxes through withholding, or don’t pay enough tax that way, may still use the Tax Withholding Estimator to determine if they have to pay estimated tax quarterly during the year to the IRS.

You Want Less Tax Taken Off Your Paycheck

Note that the IRS designed a new form in 2020, but it is unchanged for 2021. You can download a copy of the 2021 W-4 form (with all of the worksheets included) on the IRS website. The best way to fill out a W-4 is to start with the worksheets on page 3, which will guide you through the application form. There’s nothing more deflating than doing your tax return and getting blindsided by a chunky tax bill.

Here’s where you can note any other withholding adjustments, such as other sources of income not from jobs (like retirement investments), deductions you expect to claim, or extra money you’d like withheld. The updated form has a new “Step 2” section that prompts you to use the Internal Revenue Service Tax Withholding Estimator Tool. This tool will help you adjust your withholding amount to maximize benefits to your household (and your wallet). This is especially helpful to those with multiple jobs and those filing jointly with their spouses.