What is Form W-4?
Form W-4 —also known as Employee ’ s Withholding Certificate—is an IRS tax text file that is used by employers to determine how a lot of an employee ’ s wages to withhold from each paycheck for income taxes .
Employers calculate payroll taxes based on an employee ’ mho W-4 and make submit and federal tax payments on the employee ’ sulfur behalf. Filling out Form W-4 falsely could result in substantial tax obligations—plus penalties and interest—when an employee files their annual tax return key, which depends on an employer-provided Form W-2 .
Employees can besides choose to have extra taxes withheld from their wages—particularly if they hold multiple jobs, if they receive income from self-employment, or if their spouse besides earns income .
Download a fillable PDF copy of Form W-4 ( updated for 2022 ) here .
Who is Required to Fill Out Form W-4?
According to the IRS, employers are “ required by jurisprudence to withhold use taxes from their employees, ” but the duty for filling out Form W-4 correctly belongs to the employee, not the employer. specifically, newfangled hires must complete Form W-4 before they can receive their first paycheck. To stay compliant, most employers provide Form W-4 during onboarding, along with Form I-9 .
If an employee already has a Form W-4 on file with their employer, they do not need to complete a new one each year, even when the IRS redesigns the form— as it did in 2020. Employers may continue to calculate income tax withholdings based on an employee ’ s most late W-4 .
however, employees should review—and update, if needed—their W-4 withholding tax information whenever they experience a biography event that affects their fiscal situation, such as a marriage or divorce, the birth of a child, or starting another job .
How Has Form W-4 Changed for 2022?
basically, there have been no meaningful changes to Form W-4 since the major redesign in 2020 .
The 2022 interpretation of Form W-4 reflects the significant changes made in 2020, including :
- fewer lines to complete .
- no option to lower withhold by using personal allowances .
- the option to lower withhold by claiming dependents .
- the option to lower withhold by using a deductions worksheet .
How to Fill Out Form W-4 in 2022
Since 2020, filling out Form W-4 is basically a five-step process .
alone Steps 1 and 5 are required for all workers, but responding to Steps 2-4—if they apply to an employee ’ second particular situation—can ensure more accurate withholding with regards to an employee ’ s tax liability. The General Instructions on Page 2 of the form provides more information on each mistreat, privacy, who can claim exemption, and when to use the on-line calculator. For multiple-job situations, the employee should fill out Steps 3-4 for the highest paying one and leave those steps blank on the other W-4s .
The five steps include :
Step 1: Enter Personal Information
The employee should enter their full name, social security number, address, and filing status : single or married filing individually, married filing jointly or qualifying widow ( erbium ), or head of family .
Step 2: Multiple Jobs or Spouse Works
The employee should complete this step merely if they hold multiple jobs—including freelance income—or if their spouse besides works .
To calculate the accurate withholding sum in this pace, employees should do only one of the be :
— habit an calculator at irs.gov/w4app ( which will besides be used for Steps 3-4 ), OR
— use the Multiple Jobs Worksheet on foliate 3 of the form, OR
— check the box on Step 2 if there are only two total jobs. ( This box should besides be checked on the W-4 for the other job. )
Remember, for if there are multiple jobs, the employee should only fill out Steps 2-4 for the highest paying one and leave those steps blank on the other W-4s .
Step 3: Claim Dependents
To claim dependents, an employee ’ second full income should be $ 200,000 or less if filing as an individual—or $ 400,000 or less if married and filing jointly .
If applicable, employees should multiply the act of qualifying children ( senesce 17 and under ) by $ 2,000 and multiplying the number of other dependents by $ 500. They should add those dollar amounts and enter the total on pipeline 3 .
Step 4: Other Adjustments
In this optional segment, an employee can indicate whether they want to withhold more or less from their paycheck by listing other income, deductions other than the standard discount, or an extra measure to withhold per pay menstruation .
For example, an employee may choose to report passive income from interest, dividends, or retirement in this section to decrease their liability on their annual individual tax fall .
To reduce their withholding tax, an employee may besides choose to claim deductions other than the standard deduction—which is $ 12,950 for single and marry filers ( filing individually ), $ 25,900 for married filers ( filing jointly ), and $ 19,400 for heads of family in 2022 .
The IRS has provided a Deductions Worksheet on foliate 3 to help filers determine the most accurate withholding sum .
Step 5: Sign Here
The final step for employees is self-explanatory : they should sign and date the form .
There is one final measure that employers must fill out once they receive a completed form from an employee. The employer should enter the name of their organization and its cover, the employee ’ randomness first date of employment, and their employer identification number ( EIN ) .
For more information on how to complete Form W-4, check out the IRS ’ s web site —including FAQs —and read the General Instructions on Page 2 of the form.
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