Completing the IRS Form W-4 for Accurate Tax Withholding
IRS Form W-4, or the Employee’s Withholding Allowance Certificate, tells your employer how much federal income tax should be withheld from your paycheck. If you have previously worked primarily as an independent contractor, or work a combination of W-2 and 1099 jobs, filling out this form can be a little unfamiliar and potentially more complex. We recommend reading the instructions thoroughly and giving yourself enough time to complete it accurately.
It is important to accurately complete your W-4 so the correct amount of tax is withheld. This can help you avoid overpaying on taxes or having a large balance (or even a penalty) due when you file your taxes. We strongly advise you to speak with your tax professional before completing this form to ensure your unique employment situation is accurately represented.
Steps for Filling Out Form W-4
Completing Form W-4 is a five-step process. Steps 1 and 5 are required, but completing Steps 2-4 (if they apply to you) will ensure that your federal income tax withholding accurately reflects your personal tax situation at the time of filing. This will help you avoid overpaying or underpaying your taxes.
Using the IRS’s Tax Withholding Estimator for more detailed withholding calculations:
To use the estimator, you will need the following information:
Most recent paystubs for yourself and, if you are married, for your spouse.
Information for other sources of income you may have.
Your most recent income tax return.
Important note: This tool will provide exact instructions on how to adjust your withholding should your calculations estimate withholding that is too low or too high. Please be sure to follow all instructions on the final page of the worksheet if you need to adjust your W-4. The Estimator can help you to pre-fill the document.
Step 1
Personal Information (Required)
Provide your personal information and filing status. This determines your standard deduction and the tax rates used to calculate the withholding from your paycheck.
Step 2
Households with Multiple Jobs
Complete the section “Multiple Jobs or Spouse Works” if you hold more than one job or are married, filing jointly, and your spouse also works.
Step 3
Dependents
Complete the section “Claim Dependents and Other Credits” to determine the amount of child tax credit and credit for other dependents that you may be able to claim. The amount entered must be a dollar amount calculated based on the instructions provided on the form.
Step 4
Other Adjustments
This section includes any other estimated income such as interest and dividends, itemized deductions that exceed the standard deduction, and any additional tax you would like withheld from each paycheck. If you qualify, you may claim exemption under this section by writing the word “EXEMPT” under line 4(c).
Step 5
Signature & Date (Required)
Additional W-4 Recommendations
W-4 Information
The IRS has a Form W-4 FAQ page that may be helpful if you have questions when completing the form.
There is also a FAQ page specifically for the Tax Withholding Estimator with recommendations for adjusting withholding.
