The Form W-4, Employee’s Withholding Certificate is an IRS form that every employee must complete. The form allows employers to take a portion of the employee’s paychecks and forward it to the IRS on their behalf. This is because of the IRS requirement on how the federal income tax should be paid.
Instead of making one big payment to the IRS during the tax season, you pay smaller amounts every time you get your paycheck. To allow your employer to do this, you as an employee, must fill out a Form W-4 and submit it to your employer.
What if I don’t fill out a Form W-4?
This is one of the main questions regards to Form W-4. The answer to this question is very simple. Not filling out a Form W-4 will result in your employer withholding tax at the highest single rate. So if you’re married with a child, more tax than necessary will be withheld, resulting in narrowing down your cash flow.
Although you will get any amount you paid in extra on your tax return, it is best to complete a Form W-4 and withhold extra tax that way. By filling out Form W-4, you will be in charge of how much tax you’re withholding each pay period.
New Tax Withholding Form W-4
The Internal Revenue Service renews Form W-4 once in every year. Throughout the years, the tax withholding form remained pretty much the same except a few structural changes here and there. This year’s Form W-4, on the other hand, is quite different than the ones we’ve had.
To those who completed a Form W-4 in the past, allowances have been removed entirely. Now, instead of claiming allowances that were based on your anticipated tax return, you will simply detail your anticipated tax credits, deductions, etc.
With this change, the IRS aims to increase the accuracy and transparency of Form W-4. Whether the agency will keep these changes or not, we expect it to remain for the next few years.
Submission of Form W-4
The way you will give your completed Form W-4 depends on how the personnel files are stored at where you work. While many companies transitioning to store personnel files electronically, paper-filing Form W-4 is more common. In either case, you can fill out a Form W-4 on paper, scan it, and send electronically.
If the files are kept physical, simply fill out Form W-4 and hand it to the payroll department of the company or your employer.
As for obtaining Form W-4, you can start to fill out one below and print out once you complete it, or print out and fill out on paper. If you wish, you can also put your electronic signature as well.