Archive for February 2015

How to Properly fill out a W-4 (Paycheck Withholding Form)   1 comment

Whenever you start a new job, you are required to fill out a W-4, which will instruct your employer how much to withhold from your paycheck in taxes. Taxes are withheld from your paycheck because technically, you are supposed to pay your taxes (whether it is through withholding or estimated tax payments) in a timely manner (not all at the end of the year). The W-4 gives you two ways to adjust your tax withholding: claim allowances, which reduce the taxes withheld from your paycheck, and request additional money be withheld.

Now if you are single, have only one job, do not itemize your deductions, have no other source of income, and start the job at the beginning of the year, the questionnaire on the W-4 will probably result in the correct amount of tax withheld (recall that you want to end up with a refund of a big fat zero).

However, if you don’t meet all of these conditions, your withholding will almost certainly be wrong. But there is a way to calculate the correct amount of withholding! I’ll show you how through example.

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Posted February 4, 2015 by Fiby in Uncategorized