When you get a job, one of the first things you should do is fill out a W-4; your employer will likely provide you with this two-page form. Its purpose is relatively simple: It tells your employer how much money from each of your paychecks should go to the government in taxes.
It’s important to complete your W-4 form correctly so you get the right amount of money in each paycheck. If you withhold too much, you’ll get a big refund check from the government come tax time, but that means you received less pay throughout the year to pay down debt or save. On the flip side, if you don’t pay enough in taxes throughout the year, you’ll have to cut the government a check in April.
The United States tax code can be intimidating, especially at first. But if you take these instructions one step at a time, your W-4 form will be less of a mystery:
- Personal Allowances Worksheet: The first thing you’ll see on your W-4 is a worksheet that will help you fill out the bottom section of the form that you turn in. If you are single and have only one job, enter “1” on line A and “1” on line B. Total your allowances on line H.
- Boxes 1–4: Fill in your personal information.
- Box 5: Transfer your total allowances from line H of the Personal Allowances Worksheet to Box 5.
- Box 6: Most people enter “0,” but if you expect you’ll owe taxes come April, estimate the amount and put it in Box 6. If you’re not sure what to enter, use the Internal Revenue Service’s (IRS) handy withholding calculator to find out.
- Box 7: Leave this line blank unless you had no taxes withheld last year, didn’t pay taxes in April, and don’t expect to pay taxes next year either.
- Sign and date your form.
- Boxes 8–10: Your employer will complete these, so leave them blank.
Once you have filled out your W-4, return the form to your employer. You may want to keep a copy for your tax records.
If you need help, the IRS website provides a step-by-step tour of the form. You can also ask for more information from your employer’s human resources office.
If your financial situation changes—for example, if you get married, have a baby, or move—remember to revisit your W-4.