How to Fill Out Your W-4: Get Your Tax Withholding Right

Why Your W-4 Matters

Your W-4 tells your employer how much federal income tax to withhold from each paycheck. Getting it right means you will not owe a large sum at tax time or wait for a big refund (which is essentially an interest-free loan to the government).

The New W-4 (Post-2020)

The current W-4 eliminated allowances. Instead, it uses these steps:

Step 1: Personal Information

Enter your name, address, SSN, and filing status.

Step 2: Multiple Jobs or Spouse Works

If you have multiple jobs or your spouse works, use the IRS Tax Withholding Estimator or the Multiple Jobs Worksheet to avoid under-withholding.

Step 3: Claim Dependents

Multiply qualifying children under 17 by $2,000 and other dependents by $500. Enter the total. This reduces withholding to account for credits you will claim.

Step 4: Other Adjustments

4(a) Other income: Non-job income (interest, dividends, retirement) you want taxes withheld for

4(b) Deductions: If you plan to itemize or claim above-the-line deductions beyond the standard deduction

4(c) Extra withholding: Additional amount to withhold per pay period

Step 5: Sign and Date

When to Update Your W-4

Marriage or divorce

Birth of a child

Buying a home

Starting a side business

Receiving a large refund or owing a large amount

Use Taxation.ai's free withholding calculator to determine your optimal W-4 settings and avoid surprises at tax time.