The last thing you want to do is frantically run up to your boss asking “How many allowances do I claim on my W-4?”.
Being aware of the number of allowances you are claiming on a Form W-4 [Employee’s Withholding Allowance Certificate] is important for a variety of reasons. Most importantly, the number of allowances you claim on a W-4 determines the following;
- how much tax will be taken from your income (aka the withholding amount)
- the size of your tax refund
Steps to filling out a W-4
You’ll need to follow four simple steps when filling out your W-4 Form:
- Fill out your personal information (Name, Date of Birth, Address, Marital Status)
- Know the number of personal and dependency exemptions you are claiming on your tax return.
- Based on the number from step 2, use that number to help determine your number of allowances.
- Don’t forget to sign the W-4 and turn it into your employer!
The allowances you claim while filling out a W-4 if you are single will differ from the allowances you claim if you are married or have kids. Continue reading “Do I Claim Zero, One, Two W-4 Allowances?”
Are you confused on what a W-4 form is? How about a W-2?
You’re not alone.
The truth is, most of us don’t look at these complicated IRS forms on a daily basis, so when we do, we’re pretty lost! However, it’s important to know the difference between a W-4 and W-2 as both impact how much tax is taken from your paycheck and how big your refund may be when you file your taxes.
When do I need to look at these IRS forms?
W-4: You’ll receive a blank W-4 when you start a new job. As a new employee, you’ll be required to fill out this form.
W-2: Each year, at the end of January, you’ll receive a W-2 from each of your employers. You’ll refer to this form when preparing your tax return. Continue reading “W-2 or W-4 Form: How Do They Affect My Taxes?”
If you paid a large tax liability bill after filing your taxes, you might want to update your W-4 Form.
Are your friends on a summer vacation (thanks to their tax refund checks) while you’re stuck at home because you were forced to write a check for your tax due?
If you ended up writing a large check to the IRS for the total of your tax liability, it’s good to know that you’re (somewhat) in control of what that total will be next year. Surprisingly, it isn’t some randomly generated number, nor is it based on luck. In fact, it’s linked to the number of allowances listed on your W-4 form. That means, you’ll want to take a look at the number reported on your W-4 Form.
What a W-4 Form Is & How it Affects your Tax Refund
For those of you unsure of what a W-4 form is- it’s one of the forms you were handed upon your first days of employment at your job. To be more precise, a W-4 form is used by your employer to determine the amount of taxes to be withheld from your pay. The number of exemptions claimed on it directly affects your tax refund or tax due.
Continue reading “Life Changed but your W-4 Didn’t: Why You Need to Update Your W-4 Withholding”