W4 Form Withholding Tax Adjustment

Form W-4, Employee’s Withholding Certificate, previously known as the Employee’s Withholding Allowance Certificate, is the tax form used for adjusting the federal income taxes withheld from your paycheck. This tax form determines how much tax needs to be taken out from your paycheck for each pay period so that you pay enough federal income taxes to cover your tax liability for that span. Although this tax form underwent some significant changes a couple of years ago, the use of the form remains the same.

In this article, we’ll go over everything you need to know about Form W-4, including how to fill out an online copy, and answer commonly asked questions.

Who files Form W-4?

If you’re working for someone, you need to fill out a copy of Form W-4 so that your employer can withhold federal income taxes accurately. With the information provided on Form W-4, your employer can use the tax withholding tables and other things to withhold tax at an accurate rate. 

Filling out Form W-4 using the most accurate information available will result in you paying just the right amount of tax to not underpay taxes in total but also not overpay significantly – more on how to fill out the new Form W-4 below.

What happens if you don’t file?

W4 Form Withholding Tax Adjustment
W4 Form Withholding Tax Adjustment 1

There are no penalties for not filing Form W-4. However, the outcome isn’t going to be feasible either. In the event that an employee doesn’t file Form W-4 to provide accurate information to their employer about their anticipated federal income tax returns, the employer withholds taxes at the highest single rate.

The highest single rate means your employer will consider you as a single filer with no dependents and only the standard deduction on your tax return. If this applies to you, there won’t be significant differences.

However, if you have dependents and you plan to claim more than just the standard deduction or itemize, you’ll result in paying significantly more taxes every pay period. This will result in overpaying taxes by a lot, which you’ll get the excess in your tax refund, but it will reduce your cash flow seriously at the same time.

File Form W-4 Online PDF

Having said all of these, filing Form W-4 is important. Missing out on it can result in serious consequences that can shock you when you get your paycheck. 

Below, you can start filling out an online copy of Form W-4 using our PDF filler. This version of Form W-4 allows you to enter information on your computer and print out a paper copy. You can also save the document you filed as a PDF and email it to your employer if that’s how you’re anticipating sending it. 

Just need the blank Form W-4 as a PDF? Get it from here.

How to fill out the new Form W-4?

Before 2020, employees needed to claim several allowances to adjust the taxes withheld from their paychecks. This changes with the 2020 edition of Form W-4. The Internal Revenue Service made several changes where the allowances became obsolete and replaced with the employee’s actual anticipated tax return information. 

These changes were made to simplify how Form W-4 is filed and made it more accurate as claiming allowances weren’t as accurate. 

If you’re filling out the updated version of Form W-4 for the first time, you might want to take a look at our article on the most recent instructions to file.

Read W4 Form 2024 instructions to file.

The above instructions are updated every tax year. Since Form W-4 is filed only for the current tax year, not the previous ones, the instructions from the past don’t mean much.

Claiming exempt status from federal income tax withholding

Some taxpayers don’t need to withhold taxes either because they already satisfied their tax liability for that tax year or don’t earn enough for a federal income tax return. If these apply to go, make sure to read how to claim exempt status on Form W-4.

Frequently asked questions about Form W-4

W4 Form Withholding Tax Adjustment
W4 Form Withholding Tax Adjustment 2

Is Form W-4 the same as Form W-2?

Forms W-4 and W-2 are two completely different tax forms that serve purposes that aren’t the same. Form W-4 is simply the tax form you file with your employer to let them know about your anticipated federal income tax return. This helps them withhold tax accurately. Form W-4 is the tax form that reports the income you earned and taxes withheld from this income during a tax year. You’ll need Form W-2 to file your return whereas W-4 has nothing to do with it. 

Can I file the old Form W-4?

From January 1, 2020, and onwards, Form W-4 is pretty much the same for every tax year. Not only can’t you use the previous version of Form W-4 but you can’t also use the same form that’s labeled 2021 on the top left corner in 2022. 

When an employee doesn’t file Form W-4, what to do?

As briefly mentioned above, there are no monetary penalties for employees that don’t file Form W-4. What you need to do as an employer is to consider them as if they were a single filer with no dependents and only the standard deduction claimed on their tax return. Even if these apply to them, this is how you withhold tax from the paychecks of the employees that don’t file Form W-4. 

Can I enter something else on Form W-4?

Entering inaccurate information on Form W-4 knowingly is a federal crime, much like evading taxes. When you think about it, willingly tricking the system to withhold less tax is basically tax evasion. If you don’t need to pay any taxes for a period, claim the exempt status and be done with it. Do not enter wrong information on your W-4 instead.  

How can I increase withholding?

On Form W-4, there is an extra withholding section. This part of Form W-4 enables employees to enter an amount that’s added on top of what’s withheld for that pay period. The amount entered is going to be effective for every pay period, so keep your pay frequency in mind when entering the figure. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button