Employees fill out a W-4 form to inform employers how much tax to withhold from their paycheck based on filing status, dependents, anticipated tax credits, and deductions. If the form is filled out incorrectly, you may end up owing taxes when you file your return.

Who is responsible for completing Form W-4?

Every employee working in the U.S. must fill out IRS Form W-4 when they are hired at a new job. This form, called the Employee’s Withholding Certificate, includes information for the employer to use when calculating the employee’s federal income tax withholding.

Are there new W-4 forms for 2020?

On Dec. 5, the IRS released the long-awaited final version of the 2020 Form W-4, retitled Employee’s Withholding Certificate, with major revisions designed to make accurate income-tax withholding easier for employees starting in 2020.

Who is required to fill out the W-4 Form?

Now, let’s dig into each step so you can successfully guide your employees through the W-4 form. This step must be completed by all employees. If an employee does not fill out the form, you are required to calculate their withholding as “Single” so you can withhold their taxes at the higher “Single” rate.

Do you have to update your W-4 every year?

Updating your withholding amount is always optional, although the IRS recommends that employees revisit their W-4 forms every year. Okay, let’s dive into the details, so you can know how to fill out the form.

Why do I have to check box 2 on my W-4?

Checking box 2(c) tells your employer that you have multiple jobs. If you don’t want to disclose that fact, don’t check the box. In this step, the form notes that individuals with multiple jobs should complete Form W-4 with the information from their highest-paying job. That should result in the most accurate withholding. Related

What happens if you fill out a W-4 in 2021?

Taxpayers who fill out the 2021 form are less likely to wind up with a large tax bill or a giant refund when they file tax returns in 2022—money that could have been invested or spent on essential expenses throughout the year.