How To Fill Out Form W-4 in 2022
Amy Fontinelle has more than 15 years of experience covering personal finance—insurance, home ownership, retirement planning, financial aid, budgeting, and credit cards—as well corporate finance and accounting, economics, and investing. In addition to Investopedia, she has written for Forbes Advisor, The Motley Fool, Credible, and Insider and is the managing editor of an economics journal. She is a graduate of Washington University in St. Louis.
Lea Uradu, J.D. is graduate of the University of Maryland School of Law, a Maryland State Registered Tax Preparer, State Certified Notary Public, Certified VITA Tax Preparer, IRS Annual Filing Season Program Participant, Tax Writer, and Founder of L.A.W. Tax Resolution Services. Lea has worked with hundreds of federal individual and expat tax clients.
If you haven’t changed jobs, do you need to fill out a new W-4 form, just because the current form may be different from the one you filled out when you began working for your employer?
In 2020, major changes were made to Form W-4, the form every employee has to fill out to determine the amount of taxes that are withheld from each paycheck. The Internal Revenue Service (IRS) said it revised the form to increase its transparency and the accuracy of the payroll withholding system.
The new Form W-4 does not ask employees to indicate personal exemptions or dependency exemptions, which are no longer relevant. It does, however, ask how many dependents you can claim. It also asks whether you wish to increase or decrease your withholding amount based on certain factors like a second job or your eligibility for itemized deductions.
Even if you don’t have special circumstances, you may want to use Form W-4 strategically to ensure that you owe no taxes or that you’ll receive a refund when you file your federal tax return for the year. This article will help you decide if you need to revisit the W-4 form that’s on file at your job and how to fill out the revised form if you think it would be helpful. And of course if you have a new job, you will have to fill out the new form.
Key Takeaways
How a Withholding Allowance Works
When an individual is hired at a firm they are required to fill out Form W-4, which includes personal information, such as their name and Social Security Number. It also includes the number of allowances to be made.
Once the information is completed, the employer then uses the W-4 information to determine how much of an employee’s pay to subtract from their paycheck to remit to the tax authorities. The total number of allowances you are claiming is important; the more tax allowances you claim, the less income tax will be withheld from a paycheck; the fewer allowances you claim, the more tax will be withheld.
The amount of withholding is based on your filing status—single or married but filing separately, married and filing jointly, or head of household—and the number of withholding allowances you claim on your W-4. It is important to determine the right number of allowances to claim. This is to avoid trouble when you file your taxes or to keep from giving the government an interest-free loan by paying too much in taxes only to receive the amount back later.
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Source:
https://www.investopedia.com/articles/personal-finance/081214/filling-out-your-w4-form.asp
https://www.investopedia.com/terms/w/withholdingallowance.asp
https://www.nerdwallet.com/article/taxes/how-to-fill-out-form-w4-guide
