When tax season rolls around, you might find things stressful. Googling ‘how to fill out a W-4 for dummies’ doesn’t always land you on the right track, but if you’re going to fill out those tax forms right and not have the IRS knocking on your door, you need to know how to fill these things out right. But you’ll also want to do it fast, to not spend any more time on paperwork than you have to. We think the best way to get your W-4 done fast is to know as much as you can about it beforehand. Here’s the lowdown on the steps to filling out your W-4.
Your Personal Information
When you start a new job, your employer will give you a four-page form from the IRS. This is your W-4 form. It tells the IRS how much money to take from you when you’re being taxed. In this, you’ll enter your name, your address, your Social Security Number, and indicate whether you’re the head of a household, married and filing jointly or single. Here’s how the IRS defines ‘head of household’, by the way: “Check only if you’re unmarried and pay more than half the costs of keeping up a home for yourself and a qualifying individual.”
It’s important to note that if you’re exempt from tax withholding, you only need to complete Step 1(a), Step 1(b), and Step 5. Then, write “Exempt” in the space below 4(c).
Your Number of Jobs
This next step, like the others, is only applicable to some people who are filing taxes. According to the IRS, “Complete this step if you (1) hold more than one job at a time, or (2) are married filing jointly and your spouse also works.” This means that if you are single, you have a spouse who’s unemployed or you only have one blog, you can skip this section too. It’s easy to understand a W-4 form once you break it down.
If any of these scenarios apply to you, here’s the next steps. If you and your spouse are both working, and you earn roughly equal salaries, check Box C in this section, but you don’t have to fill in anything else. Your spouse should also check Box C on their W-4 form as well.
If you have multiple jobs, or if you and your spouse earn very different salaries, things get a little more complicated. Turn to page 3 and start completing step 2(b), which is the Multiple Jobs Worksheet. To speed this step up, consider using the IRS’ online tax withholding estimator, as it’ll do a lot of the math for you. This will give you your ‘extra withholding’ number. This is the amount of money you want withheld from your pay periods so you don’t end up owing extra money when it’s time to file taxes.
Claim your dependents (if any)
If you’re looking for a ‘how to fill out a W-4 for dummies’ guide, this is the step that can often seem confusing or get skipped over. Step 3, where you claim your dependents, should only be filled out for one job. If you have multiple jobs, or if you and your spouse each have a job, you only fill it out for one of all those jobs.
If you have dependents, and you’ve picked out the job you’re filling it out for, here’s the next steps. If your income will be $200,000 or less if you’re single, or $400,000 or less if you’re married and you’re both filing jointly, then multiply each qualifying child under age 17 by $2,000. For other dependents, multiply them by $500. Add all of these together, and you’ve got your final number.
Make other adjustments (if applicable)
Step 4 is where you make other adjustments, if you need to, to your W-4. Since this part can be especially confusing, it’s vitally important that you understand it properly and get it right.
Once again, if you’re married and filing jointly, or if you have more than one job, you should only fill out these sections in relation to one of the jobs. The IRS recommends focusing on the job that’s the highest paid.
On Line 4(a), you’ll be adding up all taxable income that does not come from a job. This can be retirement income, dividends, interest or any other income you might have. That way, you’ll be able to deduct that amount from your paycheck now so you don’t have to worry about it later.
On Line 4(b), you’ll be turning to your Deductions Worksheet. Through this, you’ll figure out which is better for your situation: taking the standard deductions or itemizing deductions individually. Any other applicable tax deductions, like deductible IRA contributions or student loan interest, go here as well.
Sign your W-4 and turn it in
At long last, you’ve gotten to Step 5. Take one last check over all your details to make sure they’re in order. Then, if you’re happy with them, sign your worksheet and hand it off to your employer. You’ve finally completed your W-4, and you can bask in the peace of mind of knowing it’s all filled out correctly.
Tax season can be stressful. But with the right tools, skills and knowledge, it doesn’t have to be. It’s always important to do your own research when it comes to financial matters. But this guide is a great place to start. Now we’ve walked you through the question of ‘how to fill out a W-4 for dummies’, you’ll be able to get your taxes in order in no time.
- “A Beginner’s Guide to Filling Out Your W-4”, Lifehacker, accessed 19th April 2021, https://twocents.lifehacker.com/a-beginner-s-guide-to-filling-out-your-w-4-1792359834.
- “How to Fill Out a New W-4 in 2021: Guide and FAQs”, Nerdwallet, accessed 19th April 2021, https://www.nerdwallet.com/article/taxes/how-to-fill-out-form-w4-guide.
- “How to Fill Out Your W-4 Form? Answers to FAQ About the W-4”, SmartAsset, accessed 19th April 2021, https://smartasset.com/taxes/a-guide-to-filling-out-your-w-4-form.
- “How To Fill Out W-4 Forms”, H&R Block, accessed 19th April 2021, https://www.hrblock.com/tax-center/irs/forms/how-to-fill-out-a-w-4/.