Everything you need to know about IRS W-4 Form

You are starting a new job, while almost always good news, can sometimes be tedious with all the paperwork required to get started. When you finally think you have everything ready and have even started working, they ask you for the dreaded W-4 form, and everything seems to get more complicated.

However, the idea that this form is long, tedious and complicated is wrong. Below, we will explain how it works, its purpose and, most importantly, the correct way to fill it out. This way, you will see why there is nothing to worry about.

Why do they ask for the W-4 form in jobs?

In the first instance, it is the employer's way of corroborating the veracity of everything related to your taxes and other court responsibilities. However, it is mainly requested by the IRS (Internal Revenue Service).

It is indispensable for the employer when defining the tax to withhold from the worker's salary. Due to the fact if they have family charges or not, if they are single, married, total household income, etc ., the employer defines whether to withhold more or less.

In addition, it is helpful to corroborate all current personal information because even if the employee had a form from their previous job, many things could have changed in their life. All of which can positively or negatively affect tax withholding.

Why should they withhold money from wages?

Maintaining a country with well-maintained facilities, spaces, and social systems cannot be achieved for free, i.e., the money must come from somewhere. Generally, taxes are levied on all kinds of transactions, even on the simplest and smallest purchases, and the collection of a salary is no exception.

With all the money collected from all types of taxes , infrastructures of various government institutions are created and maintained to take care of all the people and guarantee them the best possible welfare.

In addition, roads, sidewalks, squares, parks and all kinds of structures are built to improve and organise spaces. And a large percentage of the salary and non-wage withholding of taxes lies in creating and maintaining social works.

The correct way to complete the W-4 form

The filling out of the form should be quite precise and simple since it is only necessary to cover five areas, of which it is only required to fill out the first and the last one.

Although filling only those two is not very advisable, it would take only the marital status into account for calculating the withholdings, and they would be the usual common ones. For this reason, below are the five steps necessary to fill out the W-4 form.

Personal information

The personal data requested are name, address, social security number and marital status. You must be more specific for the last one, using three boxes and choosing the corresponding one.

The first one is for single or married people, but with separate forms; if you are married with an individual state, you must check the same box as if you are single. The second one is for married people who file jointly with their partners. The last and third is for heads of household responsible for more than half of the expenses necessary to maintain the home.

Other household income

Understanding by household the formation of two or more persons agreeing together under marriage or not, it must be declared if there is other income within the family, coming from the other person or an additional job. For single people with no other income besides salary, filling out this section is unnecessary.

Number of sources of income

This works hand in hand with the previous section. If there are more than two sources of income within the household, it should be specified in the last section following the instructions provided on the form. Similarly , box C should be selected if there are only two sources of income.

Calculation of estimated deductions

This is intended for those who want to and can specify all their tax returns and their respective deductions. It is entirely up to the taxpayer to choose whether to fill it in.

Signature and date

This is the last step in completing the W-4 form. The date of the day on which the state is made and, of course, sign it. This way, you can be sure about the truthfulness of the information provided in the document.

Is it difficult to fill out the form?

As we have already shown, it is far from being a complicated process. It is quite simple compared to the previous form. The new one uses the same information but is distributed much more precisely and efficiently, without the need to fill in long texts and with much more accuracy when calculating the withholding . It is only necessary to get all the corresponding information and use the required information when filling out the form.

Regarding the updating time, generally, the employer should ask you to update the W-4 form every year. And if you do not do so, it is enough to contact Human Resources to ask for all the necessary information on the correct way to update it.

However, this is not essential; the most important update will be when there is a significant change in the employee's life that could affect withholding, such as marriage, divorce, new family members, entering or leaving another job, etc.

Even for those who already had the updated form with the previous format before 2020, it is not necessary to fill out the new redesigned form if there has not been any significant change capable of changing the salary withholding. On the other hand, those who fill out the state for the first time or update the form after 2020 must do so with the new format.