The W4 tax form is used by employers to determine the correct amount of tax withholding to deduct from employees' wages.
The W4 is a very basic tax form that doesn’t change much year to year. Although its use is extremely simple, it’s good to know that you can indeed influence the amount of taxes withheld from your wages. It’s your money, and it’s usually better to get it as soon as you can.
Click here for a W-4 printable tax form
When you fill out a W4 form you’re determining the amount of allowances you want to claim. This should be based on your particular tax situation for the year.
You can use the new w-4 calculator by TurboTax to help determine the amount you should have withheld from your paycheck
Allowance Claimed Means Withholding is Reduced
For each allowance claimed, the amount of tax withholding is reduced. This means more money in each paycheck. The allowances you claim however, will reduce the size of your federal tax refund, if you have one coming to you. There is no interest paid to you if you over withhold; there can, however, be penalties for under withholding after a certain point.
Allowances Does Not Equal Exemptions
One common misconception regarding form W4 tax form is that the number of withholding allowances often equals the number of tax form 1040 exemptions.
If you have two employers, then you can forfeit this allowance with both employers, or retain it with the one providing the highest annual compensation, and forfeit two allowances with the second employer. If for any reason there is too little tax being withheld, then line 6 of the tax form allows the employee to withhold any stated amount per pay period. (This is a simple and common request).
Plenty of people don’t think to adjust their allowances from one year to the next, but it can make a huge difference in your tax refund, and every little bit counts.
To learn more about the W4 tax form or any of the other hundreds of tax forms out there, check out a tax service like TurboTax Online. They offer a free library of award winning information plus a live community of tax experts that are there to answer questions in an honest effort to help you educate yourself. Visit the web site of TurboTax today to learn more about the W4 Tax Form.