Get Familiar with Your W-4

 

If you’ve ever worked a traditional job a day in your life, or if you’re planning to, then you need to be familiar with Form W-4. You’ll see it a lot! Basically, Form W-4 is titled the “Employee’s WIthholding Certificate,” and it’s exactly what it sounds like. It’s used to tell your employer how much to withhold from your pay.  

Thankfully, though, you do have some control over how much is withheld. You choose how to “declare” yourself, and you can also decide if you want extra money withheld from your taxes so you face a smaller bill come tax time.  

Determining Withholdings  

So, you may be wondering, outside of your own control, what determines how much is withheld from your taxes? Well, to start with, your filing status counts for a lot. Typically, for example, if you’re filing jointly as a married person, less will be withheld. The same goes for if you have dependents, whether you’re married or not. Single people, especially those with no dependents, typically have the most withheld, which means they tend to get smaller paychecks.  

Taxes are also withheld for your Federal Insurance Contribution Act taxes. That money goes toward Social Security taxes and Medicare taxes, which could help you later in life.

Special W-4 Forms

In addition to the basic W-4 Form, there are also some specialized versions of this form, which you may or may not encounter in your life depending on your circumstances. These include:

●       Form W-4 (SP): This is the exact same W-4 as the traditional one, except that it’s in Spanish. Request this form if English isn’t your first language

●        Form W-4S: This form can be used if you’d like taxes withheld from your sick pay.

●       Form W-4P: Use this form for withholding taxes from an annuity or a pension.

While the W-4 Form, even with its different variations, is relatively standard, it’s easy to fill it out in a way that doesn’t benefit you. You might, for example, withhold too much and then live with unfairly small paychecks. Or, you might not withhold enough and then be hit with a big, impossible bill at tax time. For help filling out your W-4 in just the right way, don’t hesitate to reach out to a tax professional. After all, that’s what they’re there for!