WHAT’S A W-4 FORM? Employers must withhold (deduct) federal, local, and state taxes from each employee’s paycheck When hired for a job or when your financial situation changes, you must complete a W-4. A W-4 form notifies your employer of how much federal tax to withhold from your paycheck The amount of federal tax to be withheld from your paycheck depends on how many allowances you claim on your W-4. An allowance adjusts the amount of federal tax withheld from your paycheck The more allowances the less tax withheld
WHAT IF I DON’T FILL OUT A W-4? Your employer must withhold the highest amount of federal tax from each paycheck if no W-4 is provided If false information was intentionally provided, you could face fines up to $1,000, or 1 year in prison If false information was provided by mistake, no penalties will be imposed
CLAIMING ALLOWANCES The number of allowances you can claim depends on: Your marital status Dependents (usually children) you are claiming A dependent is someone who receives more than 50% of their financial support from a taxpayer who is claiming them A dependent can be claimed by another tax payer: If they’re under the age of 19 Or if they’re a full-time student under the age of 24.
GETTING STARTED Determine if you are exempt from having federal taxes withheld from your paycheck.
CLAIMING EXEMPTION Claiming exemption means that your employer will not withhold any federal tax from your paycheck You must meet certain criteria to be exempt You cannot be exempt from state tax, Social Security, or Medicare deductions If you are a student, you are not automatically exempt. If you work only part-time or during the summer, you may qualify for exemption from withholding.
SCENARIO #1 Determine if you are exempt from having federal taxes withheld from your paycheck. You plan to make $3,500 this summer before your junior year. John M. Doe Vine St. X Eastlake, OH Exempt John M. Doe 3/10/14
SCENARIO #2 Let’s suppose you’re going to work part-time this summer and this fall after school a few hours per day. You expect to make about $7,500 for the year. You’re going to be a senior next year. 1. Check to see if you’re exempt.
COMPLETING THE W-4 You must complete the Personal Allowances Worksheet prior to competing the W-4 form. Complete the following if you cannot claim exemption. Let’s assume we’re going to make $7,500 this year. 1 1
W-4 FORM John M. Doe Vine St. X Eastlake, OH John M. Doe 3/10/14