Why do you need to use Form W-4?
All new employees need to fill out the W4 Form since it informs your employers how much federal (National) tax will be withheld from your paycheck and sent to the government. The Form W-4 is important because if not enough money is withheld from your earned income, you will have to pay a large tax bill during tax season and potentially face a penalty.
As an employer, you should keep an employee’s most current W-4 Form in his or her payroll file. You also need to make sure you add the correct number of allowances into your payroll processing system. If an employee fails to complete or signs the Form W-4 before his first payroll, you must withhold federal income taxes as if the employee had chosen single with zero allowances. The company could also use the employee’s W-4 form from the previous year to calculate the withholding tax. Once completed, a copy of the signed W-4 form should be kept safe because the IRS may request a copy.
When do you need to use Form W-4?
Whenever you get a new job or experience a big financial shift in your life (purchase a home, have a child, or you get married or divorced), you need to fill out a new W-4 form.
Are there any deadlines or times for when this form is needed?
Employees must provide their employers with a completely filled and signed Form W-4 within 10 days of a change in their financial circumstances that affect their withholding. However, the IRS in Notice 2018-92 gave employees a temporary reprieve from this 10-day rule when their withholding changed solely as a result of the Tax Act. In these circumstances, employees must update their Form W-4 within 10 days of April 30, 2019 – or by May 10, 2019.
What are the main things that go on this form?
Form W-4 consists of Four pages. The first page is quite short, straightforward, and easy to fill out. The information that employees need to fill out includes:
- Name and address
- Social Security number
- Marital Status
- How many allowances you are claiming
- Any additional money you want your employer to withhold
Employers then enter their name, address, employer identification number (EIN) and the first date of the employee’s joining the job.
The other three pages of the Form W-4 includes instructions and the following three worksheets:
- Personal Allowances Worksheet
- Deductions, Adjustments, and Additional Income Worksheet
- Two-Earners/Multiple Jobs Worksheet
What are the most common mistakes to avoid?
The IRS has identified the following errors that they see at tax time. The most common tax-filing errors to avoid are:
- Wrong or Missing Social Security Numbers.
- Wrong Names or Address
- Errors in Figuring Tax Credits or Deductions
- Incorrect Bank Account Numbers
- Forms Not Signed
Do I need to use a lawyer, accountant or notary to help me?
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