Form W-4 is the form you give your employer so it knows how much federal income tax to withhold from each paycheck. Withholding is only a prepayment of your tax bill. If too little is withheld you owe at filing time, and if too much is withheld you get a refund.
The five steps
- Step 1: Personal information and filing status. You choose Single or Married filing separately, Married filing jointly, or Head of household. This sets which standard deduction and tax brackets are used for your withholding.
- Step 2: Multiple jobs or a working spouse. Withholding tables assume this is your only job. If you have a second job or your spouse works, completing this step prevents under-withholding. The IRS online estimator is the most accurate way to do it. Checking the box is simpler but a rougher estimate.
- Step 3: Claim dependents. Enter the credits you expect, such as the child tax credit and the credit for other dependents. This reduces the tax withheld.
- Step 4: Other adjustments. You can add other income that has no withholding (4a), enter deductions beyond the standard deduction (4b), or request an extra dollar amount withheld from each paycheck (4c).
- Step 5: Sign. The form is not valid until signed.
No more allowances
Forms W-4 from 2020 onward no longer use "allowances". If you filled one out years ago, your employer may still be using the old method. Submitting a new form switches your withholding to the current method.
How the W-4 affects take-home pay
The W-4 only changes the federal income tax line on your pay stub. It does not change Social Security or Medicare, and most states use their own withholding form. The calculator on this page assumes a standard W-4 with your filing status and no extra adjustments, so a W-4 with extra withholding will make your real paycheck smaller than the estimate.
When to update your W-4
- You get married or divorced.
- You have a child or a dependent's situation changes.
- You start a second job, or your spouse starts or stops working.
- You had a large refund or tax bill last year and want it closer to zero.
- Your income changes a lot, for example a raise, bonus or side income.
Refund or bigger paycheck?
A large refund means you lent the government money interest-free during the year. Reducing your withholding gives you more in each paycheck but leaves less cushion at filing time. This is a personal choice. Check the IRS Tax Withholding Estimator for your own situation.
Try the take-home pay calculator to see your own numbers, or pick your state from the state list.