Completing a W4 Form

How does an employer know how much taxes to withhold from your paycheck? A. They will withhold as much as possible B. You inform them when you’re hired C. The IRS informs them D. They don’t withhold anything 2 PRE-TEST

Where can you get a W-4 form? A. Your employer B. The IRS C. Purchase from a forms vendor D. Both A and B E. None of the above 3

How do you complete a W-4 form? A. Copy from a friend that has done it before B. Tell the HR person to fill it out for you by entering default values C. Download a pre-filled form from the internet D. Fill out your personal information and circumstances 4

Learning targets I can: Explain the function of a W-4 form Fill out the contents of a W-4 form 5

What is the IRS W-4 form? It’s the Employee's Withholding Allowance Certificate Tells your employer how much income tax to withhold from your paychecks 6

Where can I find a W-4 form? From your employer OR… 7

…download one from the IRS website… 8

How do I complete a W-4 form? Follow these easy directions… 9

Complete lines 1 & 2… Provide your name, address, and Social Security number… 10 14

Complete line 3… Check box for marital status 11 14

Complete lines 5 & 6… Insert the number of allowances you will claim. What is an allowance? It is a number used to determine how much of your paycheck to be withheld in income taxes. 12

About Allowances... The LOWER the number of allowances you claim, the MORE taxes are withheld. The HIGHER the number of allowances you claim, the LESS taxes are withheld. 13

More on Allowances... The IRS provides a rough formula for how many allowances taxpayers should claim to have the correct amount withheld from each paycheck. You can claim one allowance for yourself, one for your spouse and one for each of your dependents. 14

More on Allowances... When your personal or financial situation changes (for example, you get married, take out a mortgage, or get a second job), you should recalculate your withholding allowance and submit a new form W-4 to your employer. 15

More on Allowances... If you don’t submit IRS form W-4 to your employer showing how many allowances you want to claim, your employer will assume that this number is zero, and you’ll have the maximum amount of income tax withheld from each paycheck. 16

How do I figure how many allowances to claim? Complete the Personal Allowances Worksheet 17

How do I determine how many allowances to claim? Complete lines A through G… 18

Now add the number of dependents you have claimed and write the total on line H… 19

The back side of the W-4 form contains two addition worksheets to use if.. You plan to itemize deductions or claim credits or adjustments to income There are two earners in your household or you have multiple jobs 20

How do I determine how many allowances to claim? You will probably claim either a ‘0’ or ‘1’ AND… with “0”, the highest amount will be withheld 21 Remember, The LOWER the number of allowances you claim, the MORE taxes are withheld. The HIGHER the number of allowances you claim, the LESS taxes are withheld.

22 If your individual income is less than the standard deduction, you have no income tax liability. Standard deduction = the amount of income that is not subject to income tax The standard deduction for 2013 is $6,100 for an individual. If you made less than the standard deduction, any federal and state income taxes withheld in 2013 will be refunded to you when you file your taxes in Remember, Social Security and Medicare taxes are NOT refunded, regardless of your income.

Can I claim “EXEMPT” ? From Form W4: “If another person can claim you as a dependent on his or her tax return, you cannot claim exemption from withholding if your income exceeds $1,000 and includes more than $350 of unearned income (for example, interest and dividends).” Exceptions for age, blindness, etc. 23 NO

If you are ‘exempt’ from paying taxes… Skip lines 5 & 6, complete line 7!! If you earn less than $1,000 in the year and you have less than $350 of unearned income, and no one can claim you as a dependent on their tax return, then……. YOU ARE EXEMPT… So, skip lines 5 and 6 and write “EXEMPT” on line YES

You are done ! Give the completed W-4 form to your employer. Your employer will complete lines 8, 9,

How does an employer know how much taxes to withhold from your paycheck? A. They will withhold as much as possible B. You inform them when you’re hired C. The IRS informs them D. They don’t withhold anything 26 POST-TEST

Where can you get a W-4 form? A. Your employer B. The IRS C. Purchase from a forms vendor D. Both A and B E. None of the above 27

How do you complete a W-4 form? A. Copy from a friend that has done it before B. Tell the HR person to fill it out for you by entering default values C. Download a pre-filled form from the internet D. Fill out your personal information and circumstances 28