Understanding Your W-4 Form

If you’ve ever worked in the US, you’re likely familiar with a W-2 and a W-4. But what exactly are they and what’s the difference? Well, I’m glad you asked. A W-2 form and a W-4 form are both tax-related forms used in the United States. However, they serve quite different purposes.

A W-2 form is used by employers to report their employees’ annual earnings. It also shows the amount of taxes withheld from their paychecks during the year.

This form is typically issued to employees by the end of January. It is used to file income tax returns with the IRS. Basically, this is the form everyone is waiting on come tax time.

A W-4 form is used by employees to inform their employer how much federal income tax should be withheld from their paycheck.

When you start a new job, you will fill out a W-4 form. This includes information such as your filing status, the number of allowances you are claiming, and any additional withholding you would like to request.

The W-4 helps your employer determine how much to withhold from your paycheck for federal income tax. If you claim more allowances, less tax will be withheld from your paycheck. This equates to having less owed when you file your tax return. It’s important to review your W-4 periodically, especially if your circumstances change. For example, marriage and/or having a child greatly affect your taxes.

In summary, a W-2 form reports how much you earned and how much tax was withheld during the year. A W-4 form, on the other hand, tells your employer how much tax to withhold from your paycheck.

W-4 form specifics

  • Filling out a W-4 is important: Your W-4 form determines how much federal income tax will be withheld from your paycheck so accuracy is key. If you don’t have enough tax withheld throughout the year, you may end up owing taxes when you file your tax return. Nobody wants that.
  • The number of allowances you claim affects your tax withholding: The more allowances you claim, the less tax will be withheld from your paycheck. The number of allowances you can claim depends on your personal situation (i.e. whether you are married or have dependents).
  • You can adjust your withholding at any time: If you find that too much or too little tax is being withheld from your paycheck, you can submit a new W-4 form to your employer to adjust your withholding.
  • The IRS provides a withholding calculator: If you’re not sure how many allowances to claim, the IRS provides a withholding calculator that can help you determine the appropriate amount of tax to be withheld from your paycheck.
  • Location matters: It’s important to keep in mind that the information on a W-4 form only applies to federal income tax withholding. State and local taxes may also be withheld from your paycheck, depending on where you live and work.

Your W-4 form is how you control your taxes. Make sure it’s accurate and up-to-date and you’ll be in good shape come tax time.

Headshot picture of the writer of this article, Kenneth Medford III, with a muted black and white filter.
Kenneth Medford III

Writer, rhymer, gamer: the easiest way to define the man known as Kenneth Medford. I’m a simple man who loves to learn and loves to help and I wander the digital world trying to find ways to sate my hunger for both. Basically, I’m Galactus but helpful.

Check out my other work here or reach out to me on LinkedIn.

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