What is a Form W4 or Tax Withholding?

This is an IRS form for withholding taxes, so the "W" stands for "withhold" or "withholding" (to take out) while the "4" is just an identifying number. This form is submitted to your employer by you and tells them how much money to pay in taxes to the IRS on your behalf from each paycheck.

A W-4 determines a taxpayer's IRS tax withholding amount for a given paycheck and pay period. The W-4 form is a tax withholding planning form, thus you have some flexibility in managing your tax withholding goals. For example, on the date you prepare the W-4, your filing status might be different than when you prepare your tax return next year. Thus, you can plan for this change now via your W-4. You can increase tax deductions in order to reduce your tax withholding. See state details as most states also have taxes which you can have withheld through a different form.

A: At the beginning of a new job.
B: When your life has changed or will change (you might get married or divorced by the end of year, for example).
C: You might be able to claim a dependent on your next tax return.
D: Your total taxable income for the year might change.
Important: You do not have to wait until any of the events take place, but you can complete a W-4 in preparation of these events as they might change the results of your next tax return.

You can submit a new W-4 at any point or as often as you wish during your employment.
Most of the time, a W-4 is submitted at the beginning of any new job or employment. You should update your form W-4 as the result of a life changing event: marriage, divorce, change of dependents, expected increase or reduction of annual income.

The form itself will not provide this. You can use our free paycheck-based W-4 calculator to find out what your IRS tax withholding would be based on your W-4 entries, filing status, dependents, and deductions.
Or, you monitor your first paycheck after you have submitted the new W-4 form to your employer.
Even if you know the per paycheck tax withholding amount you do not know how it would affect your tax return. For that, we suggest you use the tax return estimator and enter the annual paycheck-based tax withholding amount and your annual income and you can estimate if you can expect a tax refund or if you might owe taxes.

• You will need to enter your name, address, SSN, and add a signature and date.
• Enter your tax return related information: siling status, number of dependents or other dependents, and deductions.
• Keep in mind that the W-4 is a planning tool and if you complete the form during the year, you could enter the information that might apply to you by the end of the year. For example, you might not be married when you complete the form, but you might be married by the end of the year, thus you would file your tax return under the filing status married. The same might apply for dependent(s) or deductions.
• Use any of these W-4 tools: W-4 Creator or Paycheck based W-4 or Tax Return Estimator.

You can submit a W-4 now and it will go into effect by your next paycheck. We recommend using our free calculators to know the right amount to withhold.

Example: Your return last year showed a $1,200 refund and you expect to make similar money this year. Take a look at your last paycheck, take the tax withholding amount, and decrease your withholding by $200 (monthly pay period) or $100 (bi-weekly pay period) between the remaining months of May through December 31. As a result, you should get a smaller refund this year and not owe taxes, but increase your paycheck per pay period. Do the reverse if you owed taxes on last year's return.

• A: For a high-level, annual income-based estimate, use the income tax rate calculator.
• B: For a paycheck-based estimate, use paycheck calculator.
• C: For the most comprehensive, detailed calculation, estimate your tax return first.
• D: To just fill out and complete the W-4 without any prior estimate, use the W-4 creator tool.
• E: Estimate your state income taxes before you select the state tax withholding form.
• F: Discuss your W-4 plans for free with a Taxpert^® now.

Step 1: At any given time in the year, take all your pay-stubs (including your spouse) and add up all the federal tax withholding year to date.
Step 2: Add up all other federal tax withholdings yesr-to-date (YTD) and IRS estimate payments you made YTD.
Step 3: Based on Step 1 and Step 2 estimates, add up the remaining IRS tax withholdings for the remainder of the given year.
Step 4: Add up Step 1 + Step 2 + Step 3 = total estimated IRS tax payments for the year.
Step 5: Use either the income tax rate calculator or the tax calculator and enter the annual tax withholding amount and as a result you will find out if you can expect a tax refund or if you might owe taxes.

Depending on your income, filing status, and number of qualified dependents, your paycheck tax withholding could be zero each paycheck. At the same time, you could qualify for a substantial IRS tax return refund. In most cases, this is due to the Child Tax Credit or Earned Income Tax Credit. Read this chart to see cases with zero paycheck tax withholding that resulted in tax refunds: tax returns with zero paycheck-based IRS Tax Withholding with refunds.

A W-4 is submitted only to your employer, not the IRS or state tax agency.
Keep a copy of your latest W-4 Form for your own records. Find your state tax withholding form(s).

Estimate your state income taxes with a state income tax estimator and then select your state tax withholding form(s). You can use the calculation to fill out your W-4.