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How To Fill Out a W-4 Form for 2023

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It is after the holidays but before spring cleaning which can mean only one thing, tax time is upon you. Gather up your forms and get out your calculator, it is time to figure out exactly what your tax situation is this year. The amount of taxes you either owe or are due is directly attributed to the information on your W-4 form. 

Read: 3 Ways Smart People Save Money When Filing Their Taxes

What Is a W-4 Form?

The W-4 form is an Employee’s Withholding Allowance Certificate designed to let your employer know how much of your income to withhold for federal taxes. You should fill out a new W-4 when you have started a new job, if your personal situation changes or if you want to adjust the amount withheld.

The form includes the following fields:

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To help you determine what to claim on a W-4 and the amount to withhold from your paycheck, the IRS provides you with two worksheets:

If you already have a W-4 on file for your existing job, you do not need to change anything yet. However, if you started a new job recently, plan to make any personal life status adjustments, or want to increase or decrease your amount withheld, you will need to fill out the new W-4 form.

How To Fill Out a W-4

Your W-4 form will display several distinct sections for you to fill out. Be sure to only fill out sections that are relevant to your work and life in the previous year. Follow the steps below to complete your W-4 form with confidence when applicable.

  1. Fill out the Multiple Jobs Worksheet.
  2. Fill Out the Deductions Worksheet. 
  3. Complete the Employee’s Tax Withholding Certificate. 

1. Fill Out the Multiple Jobs Worksheet 

If you have more than one job at a time or are married filing jointly and have a working spouse, you should fill out the Multiple Jobs Worksheet.

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“Since your multiple employers don’t withhold taxes based on your total salary, the easiest thing to do is to withhold at a higher rate,” said Audrey Goetz, a certified public accountant, certified valuation analyst and manager at the accounting firm Rudler, PSC. “This makes sense if you have, say, two $25,000-a-year jobs. Both employers will withhold based on individual incomes of $25,000. However, that does not take into account that you have two jobs that produce $50,000 of income, and you could end up under-withheld come year-end.”

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2. Fill Out the Deductions Worksheet 

Complete the Deductions Worksheet only if you plan to itemize your deductions or claim certain credits on your income tax return. You won’t need to do this if you plan on claiming a standard deduction on your income tax return.

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3. Complete the Employee’s Tax Withholding Certificate 

Once you have completed any applicable worksheets, you can begin filling out the W-4 form with your tax withholding choices that you will give to your employer. 

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What’s the Difference Between a W-4 and a W-2?

A W-4 is the IRS tax form you fill out upon employment, so your employer will withhold your desired amount of federal income tax from your paycheck. A W-2 is the IRS tax form you receive from your employer at the end of the tax year. It includes information on how much money you earned, how much money was withheld for federal and state taxes, and other contributions made to Social Security and your employer-sponsored 401(k) account. You’ll use the W-2 form when filing your taxes.

Final Take

Filling out your W-4 form correctly can help you to avoid a massive tax bill. Remember to take your time, read through everything and gather any documentation you may need to make sure everything is correct for your tax paperwork.

FAQ

Here are the answers to some of the most frequently asked questions regarding W-4 forms.
  • Do I claim zero or one on my W-4?
    • The difference between claiming zero or one is in the withholding amounts. By claiming zero, you are indicating that you want the most amount of tax taken out of your pay each pay period. Claiming one for yourself will mean less tax is taken out of your pay each pay period, so it is a matter of preference and how you would like to budget.
  • Will the amount of money earned from investments and dividends affect the W-4?
    • The IRS classifies investments and dividends as non-wage income. When you are earning a significant amount of non-wage income, you can make estimated tax payments using form 1040-ES to avoid owing additional tax when tax season rolls around.
  • How many allowances can be claimed on a W-4 form?
    • Since the IRS made changes to and redesigned the W-4 form, personal allowances no longer need to be included for 2020 and forward.

Gabrielle Olya contributed to the reporting for this article.

Information is accurate as of Feb. 6, 2023.