What is a W-4 Form?

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  • Written By: Alexis W.
  • Edited By: Heather Bailey
  • Last Modified Date: 03 May 2020
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A W-4 form is a form published by the Internal Revenue Service (IRS) in the United States. The W-4 form is provided by employers to new employees to determine how much federal and state income tax is to be withheld from an employee's paycheck. An employee fills out a W-4 form with information about himself and his dependents, and must make changes if his personal situation changes.

Within the United States, the income tax system is a pay-as-you-go system, which means that every employee and worker must pay a portion of his income as he makes it. For self-employed people, this means sending in estimated quarterly taxes based on the amount of income they are making. For employees, their employers take care of the required payments by withholding a certain amount of money from each paycheck.

Employers must withhold a set amount of money for federal income taxes, referred to as FICA. Employers must also withhold money from an employee's paycheck to pay the employee's state taxes. Finally, employers must take money from employees to pay Social Security and Medicare taxes for the employee.

The amount of money an employer must take from the employee's paycheck depends on the employee's salary and on the employee's tax obligation. People who have many dependents, or those who they are supporting, are entitled to tax credits for each dependent. Thus, the employer must obtain this information from the employee to determine how much money to withhold.

The W-4 form is thus given to an employee so he can fill it out to get the employer the required information needed to withhold taxes. The W-4 form's instructions explain what a dependent is, so employees can calculate the number of dependents they have and fill out the form with the proper number. There is also a spot on the form where an employee can specify that he is subject to backup withholding — which means he owes money to the IRS and more should be taken out of his check — or where an employee can specify that he is tax exempt.

The law requires employees to fill out a W-4 form honestly. The employee must also provide his Social Security number and other identifying information on the W-4 form. A copy is kept by the employer and another copy is sent to the IRS. The employer then withholds the appropriate monies as determined by the W-4 form and IRS withholding tables, and sends in the correct amount of taxes to the IRS.

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