This lesson is general education about U.S. personal finance, not financial, tax or investment advice. Tax rules and limits change every year; check IRS.gov or a qualified professional for your situation.
What you’ll learn
- The current W-4 has no allowances; it works from your filing status, other jobs, dependents and adjustments.
- Step 2 matters if you have more than one job or your spouse works.
- The IRS Tax Withholding Estimator gives the most accurate result.
- Submit a new W-4 whenever your situation changes.
Every new job comes with a Form W-4. It doesn’t change how much tax you owe for the year. It changes how much is paid in advance through your paychecks, and therefore whether you get a refund or a bill when you file.
Step 1: Your details and filing status
Enter your name, address and Social Security number, and choose a filing status: single or married filing separately, married filing jointly, or head of household. Many people stop here, and for someone with one job and no other income, that’s often close enough.
Step 2: More than one job, or a working spouse
This is the step people skip and regret. Each employer withholds as if its paycheck were your only income, so two jobs can leave you underwithheld. The form gives three ways to fix it:
- use the IRS Tax Withholding Estimator on IRS.gov
- complete the Multiple Jobs Worksheet
- check the box in Step 2(c) on the W-4s for both jobs, which works well when the two jobs pay about the same
Step 3: Dependents
If your income is within the limits on the form, multiply your qualifying children and other dependents by the amounts shown and enter the total. This reduces withholding to reflect credits you’ll claim.
Step 4: Other adjustments
- 4(a) Other income: interest, dividends or other income without withholding.
- 4(b) Deductions: if you’ll itemize or claim deductions beyond the standard deduction.
- 4(c) Extra withholding: a flat extra amount per paycheck, handy if you have side income.
Step 5: Sign
The form isn’t valid without your signature.
Worth knowing. If you earn money from a side gig, adding an amount in Step 4(c) can cover the tax on it through your main job instead of making separate estimated payments. Our lesson on taxes on side income has the details.
When to submit a new one
Give your employer a new W-4 after a marriage or divorce, a new baby, a second job, a big raise, or if last year’s refund or bill was larger than you wanted. Then check your next pay stub to see the change.
Common questions
Can I claim exempt from withholding?
Only if you owed no federal income tax last year and expect to owe none this year. An exempt W-4 expires, so it has to be renewed each year.
What happens if I don’t turn in a W-4?
Your employer must withhold as if you were single with no other adjustments, which may be more than you need.
Does the W-4 affect state taxes?
No. Many states have their own withholding form. Ask your employer which one applies.