If you don’t want to reveal to your employer that you have a second job, or that you get income from other non-job sources, you have a few options: On line 4(c), you can instruct your employer to withhold an extra amount of tax from your paycheck. Alternatively, don’t factor the extra income into your W-4. Instead of having the tax come directly out of your paycheck, send estimated quarterly tax payments to the IRS yourself instead.
A Beginner’s Guide to Filling Out Your W-4
Maybe you started your first job or maybe you gave up the freelance life for full-time employment. Whatever your scenario, if you find yourself filling out a W-4 for the first time, you may be a touch confused by all the fields, worksheets, and forms. Yes, the IRS can make things confusing. Let’s take it one step at a time.
When you start a new job as an employee , your new employer will give you a W-4 . Your W-4 is a four-page IRS form that basically tells your employer how much money to take out of your paychecks to cover taxes—and it was modified in 2020 to help people request the most accurate tax withholdings possible.
Step 1: Enter Personal Information should be fairly easy. Enter your name, your address, your Social Security Number (now’s a good time to memorize your SSN, if you haven’t already) and indicate whether you are single, married filing jointly, or the head of a household.
The “head of household” term is probably the only confusing part of this section, but the IRS explains what “head of household” means right on the form: “Check only if you’re unmarried and pay more than half the costs of keeping up a home for yourself and a qualifying individual.” If that’s not you, don’t check the box.
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Here’s the New, Much Better W-4
A note about exemptions
If you are exempt from tax withholding, you only need to complete Step 1(a), Step 1(b), and Step 5 — and then you can write “Exempt” on Form W-4 in the space below Step 4(c). Generally, you can only claim exempt if you don’t have any tax liability, meaning you didn’t owe any tax last year due to earning income, or you didn’t need to file a tax return at all.
How to fill out a W-4 form for a job
Form W-4, Employee’s Withholding Certificate, is generally completed at the start of any new job. This form tells your employer how much federal income tax withholding to keep from each paycheck. This form is crucial in determining your balance due or refund each tax season.
For instance, if you withhold too much, you can end up with a large refund. If you withhold too little, you can create a balance due and potentially an underpayment penalty. Check out our step-by-step process below, which will walk you through how to fill out a W-4 form for a job.
Multiple jobs worksheet
Line 1
Using the “Higher Paying Job” row and the “Lower Paying Job” column, find the value in concurrence with both salaries in each row, enter that value on line 1
Using the table on the four, find the wage for the “higher paying job” and compare it with any numbers of wages for “low paying jobs” by moving to the right
Line 2
The second column is the one with the two high wages. Again, find the wage or salary for the highest-paying job in column B at row 2 and then look across (to column A). The number at that intersection will give you your rate of pay. Line 2a belongs to the 2 highest paying jobs.
Line 3
Line 3 is the number of pay periods per year for the highest-paying job. For example, if that job pays weekly, then 52 goes on line 3. If it pays bi-monthly, then 24 should be entered.
Line 4
When calculating the monthly net pay for your employees, you’ll need to divide either line 1 or 2c by the number of pay periods on line 3. This is what you’ll find in step 4c.
How to fill out your W-4 to get more money
As mentioned at the top of this post, your W-4 withholdings affect what’s taken out of your paycheck each period and your potential refund. In fact, they are related in that taking more taxes out of your pay can mean a larger refund—and the inverse can be true.
Additionally, any time you have a major life event you should consider updating your W-4. A marriage, divorce, a new baby, or a child turning 17 will have an effect on your taxes and should be taken into consideration in filling out your W-4.
W-4 calculator
How FICA Tax and Tax Withholding Work in 2021-2022
Form W-2, Wage and Tax Statement: What It Is & How It Works
Taxes on 401(k) Withdrawals & Contributions
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References:
https://lifehacker.com/a-beginner-s-guide-to-filling-out-your-w-4-1792359834
https://www.hrblock.com/tax-center/irs/forms/how-to-fill-out-a-w-4/#:~:text=How%20to%20fill%20out%20a%20W-4:%20step%20by,…%205%20Sign%20and%20date%20your%20form.
https://incomedigits.com/2022/02/14/how-to-fill-out-a-w-4-for-dummies/
https://www.hrblock.com/tax-center/irs/forms/how-to-fill-out-a-w-4/
https://www.nerdwallet.com/article/taxes/how-to-fill-out-form-w4-guide