Here's how to fill out the new W-4 form if you change jobs, get married, or want a bigger tax refund next year
- The IRS debuted a new W-4 tax withholding form this year that's simpler and more streamlined.
- Employees must complete a W-4 and submit it to their employer(s) so they know how much to withhold from their paycheck for income taxes.
- A new form should be completed if there are any changes in your financial situation, such as marriage, kids, or a new job.
- The new form makes it easy to control the amount of taxes you pay throughout the year. If you elect to withhold more taxes than you owe based on your income and filing status, you'll likely get a tax refund.
- This post has been reviewed for accuracy by Thomas C. Corley, CPA.
- Check out Business Insider's picks for best tax software »
Filing out a tax form is nobody's idea of a good time.
But if you want to avoid a tax bill next year - or get a bigger refund - you should be checking up on your W-4 tax withholding form at least annually.
Anytime you start a new job you'll be required to fill out a new W-4, but you should revisit the form if you get married, have a baby, or take on any additional jobs. That's because your filing status, dependents, and additional income can change your tax liability.
The IRS released a redesigned W-4 this year to reflect changes implemented by the Tax Cuts and Jobs Act. The new form is simpler and more streamlined than past versions. It's only five steps, and most people won't need to complete all of them.
As with any tax matter, the form will be most easily navigable for single filers with one job and no dependents. If you add multiple jobs, self-employment or investment income, spouses, or kids into the mix, things get a bit more complicated.
How do I fill out the new W-4 form?
Below is what the new W-4 tax withholding form looks like. Everyone is required to fill out steps 1 and 5.
If you have a more than one job or a spouse who works, you'll complete step 2. The IRS notes that some taxpayers may be worried about disclosing additional jobs to their employer so there are multiple ways to calculate your withholdings for this section. Generally, there are three options, which "involve tradeoffs between accuracy, privacy, and ease of use," according to the IRS.
For "maximum accuracy and privacy," the IRS recommends using its Tax Withholding Estimator to determine the amount that should be withheld based on your income for one or more jobs. If you work as an independent contractor, you can choose to pay estimated quarterly taxes instead of having part of your paycheck withheld.
If you claim dependents and earn less than $200,000 as a single filer or $400,000 as a joint filer, you'll follow the instructions in step 3. This is to determine credits you may be eligible for.
Step 4 is optional, but if you have interest, dividend, or retirement income or you plan to claim itemized deductions when you file your taxes, fill this out. Also, if you would like to withhold additional money from each paycheck in order to get a bigger refund next year, you can enter the dollar amount in this section.
Remember, though, that a tax refund means you aren't getting all the money that's rightfully yours throughout the year. In essence, you're loaning the government money, interest-free. If you want to get as close to your true tax liability as possible, carefully and thoughtfully fill out - and check up on - your W-4.
How often do you need to fill out a W-4 form?
Tax experts recommend revisiting your W-4 form at least annually, but sooner if you get married, have a baby, change jobs, or begin earning additional income at any time throughout the year. This form helps your employer calculate exactly how much to withhold from each paycheck to cover your tax liability. If it's inaccurate, you risk over- or under-paying.
You can ask your human resources department for a new form whenever you need it.
How many allowances should I claim on my W-4?
The redesigned W-4 doesn't allow you to claim allowances. Instead, you're guided through a step-by-step process that calculates your withholding amount based on your current financial situation.
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