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THE STEPS TO COMPLETING A FORM W-4 Mr. Stasa W-E City Schools ©

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Presentation on theme: "THE STEPS TO COMPLETING A FORM W-4 Mr. Stasa W-E City Schools ©"— Presentation transcript:

1 THE STEPS TO COMPLETING A FORM W-4 Mr. Stasa W-E City Schools ©

2 W-4 FORM

3 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

4 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

5 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.

6 GETTING STARTED  Determine if you are exempt from having federal taxes withheld from your paycheck.

7 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.

8 $6,200

9 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 222-33-4444 5674 Vine St. X Eastlake, OH 44095 Exempt John M. Doe 3/10/14

10 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.

11 $6,200

12 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

13 W-4 FORM John M. Doe 222-33-4444 5674 Vine St. X Eastlake, OH 44095 1 John M. Doe 3/10/14


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