How you fill out your form W-4 determines how much federal income tax is withheld from your paycheck. There are nuances how to fill out W4, whether you want a bigger take-home pay or a tax refund. It depends on your circumstances. Find out how.
Contents
What is a W-4?
Form W4, officially called Employee’s Withholding Certificate, informs your employer how much federal tax to withhold from your payroll, directly affecting your take-home pay and potential tax refund. It’s mandatory to fill out one when you start a new job (voluntary if you face major life changes).
The Internal Revenue Service releases updated versions of tax forms every year. You can get your 2025 W-4 from your employer or directly through the IRS website
How W4 Has Changed in Years: The old W4 used ‘allowances’ to lower tax withholdings, meaning more allowances, less taxes withheld. From 2020 and onwards, due to TCJA, allowances or personal exemptions no longer apply. The new W4 uses claiming dependents or a deductions worksheet to lower withholding.
When Do I Need to Update My W4?
Filling out W4 is typically required when you start a new job or change your filing status. You do not have to fill out a new W-4 every year if your situation stays the same; you can simply review it annually.
If you go through major life changes that can impact your tax liability, you need to update your W4 as soon as possible. These life changes include:
- Got married
- Went through a divorce
- Having a new baby or dependent
- Your child is turning 17
You can adjust your W-4 anytime to have more or less tax withheld based on your financial goals, whether you aim for more or less tax in your paycheck. Note that ‘less tax’ does not mean having smaller tax bills. You may get a bigger take-home pay, but you will have to settle your outstanding bill in your annual tax return.
How to Fill Out a W-4 Form: Step-by-Step
There are 5 parts in your W4 form. Here’s a general guide:
Step 1: Personal Information
- Provide your name, address, Social Security Number (SSN), and tax filing status (single, married filing jointly, etc.).
- Your filing status impacts eligibility for credits or deductions.
- You can stop here for default withholding, but further steps help accuracy.
Step 2: Multiple Jobs/Spousal Income
If you have more than one job or file jointly with a working spouse, choose one of these:
- IRS Withholding Estimator: Most accurate, especially for self-employment income.
- Multiple Jobs Worksheet: Complete on the W-4 for the highest-paying job only.
- Check the box: For two jobs with roughly equal pay (check on both W-4s). This method splits the standard deduction in half for every job.
If you complete Step 2, only fill out Steps 3-4(b) on the highest-paying job’s W-4.
Tip for Privacy: Instead of Step 2, you can request extra withholding (4(c)) or make estimated tax payments.
Step 3: Claim Dependents
- If your income is below the child tax credit threshold ($200k single, $400k joint), enter the number of qualifying children under 17 and other dependents.
- Multiply by the credit amount.
- Only claim dependents on the W-4 for the highest-paying job.
- You can choose not to claim dependents for higher withholding.
- Other tax credits can also be reflected here.
Step 4: Other Adjustments
4(a) Other Income: Report income not subject to withholding (e.g., interest). This increases withholding.
4(b) Deductions: If you plan to itemize, use the Deductions Worksheet and enter the result here. These decreases withholding.
4(c) Extra Withholding: Enter any additional amount you want withheld for each paycheck. This increases withholding.
Only claim other income or deductions on one W-4.
How to fill out W4 for exempt from withholding status (very specific circumstances): Write ‘Exempt’ below 4(c).
Step 5: Sign and Submit
- Sign and date the completed form.
- Give it to your employer’s HR or payroll department (may be done online).
Completing all relevant steps on the W-4, especially Steps 2 to 4 for more complex situations, helps ensure your tax withholding is accurate and minimizes surprises when you file your tax return. Only make certain adjustments (multiple jobs, dependents, other income/deductions) on one W-4 to avoid errors.
How to Fill Out W4 Per Your Circumstance
There are many ways you can fill out your W4 depending on your life circumstance and taxpayers status (single, married filing jointly, married filing separately, head of household, and qualifying surviving spouse).
How to Fill Out W4 for Students
Often, students who can be claimed as dependents may only need to fill out their personal information and sign.
How to Fill Out W4 If Single
It’s the same process as above. It depends on your financial goals. If you want to increase withholding, see 4 (a). If you want to decrease it instead, use itemized rather than the standard deduction. See 4 (b) above.
How to Fill Out W4 for Second Job
If you prefer not to inform your employer about a secondary job or income from non-employment sources, you can either direct your employer to withhold an extra amount on line 4(c) or omit the income from the form and pay estimated taxes directly to the IRS.
How to Fill Out W4 If Married and Both Work
Married couples who both work should complete their W-4s together to avoid over or under-withholding, especially regarding deductions and dependents (claim on one form only).
If filing jointly and earning roughly the same, there’s a box to check on the W-4 to potentially avoid over-withholding.
How to Fill Out W4 with Multiple Jobs
This is cleared in step 2. If you are self-employed at the same time, choose the IRS Withholding Estimator. You can also simply choose the Multiple Jobs Worksheet and fill out only your highest-paying job. If you pay the same for two jobs, check on both options.
How to Fill Out W4 with 2 Dependents
It does not matter how many dependents you have. It’s the same way how to fill out W4 with 1 dependent as long as your income is below the threshold (either child tax credit or child and dependent care credit) according to your filing status ($200k for single, $400k for joint).
If you increase the number of your dependents, you will withhold less tax. If you want to withhold more tax, you can reduce the number of your dependents or add an extra amount to withhold on line 4(c).
Note that you can submit another W-4 if the withholding is not where you want it. Accurate W-4 completion, considering filing status, family situation, other income, and deductions, is crucial to owing nothing or getting a minimal refund at tax time.
Other Frequently Asked Questions
Yes, changing your tax filing status affects your paycheck withholding. For instance, switching from Married Filing Jointly to Single usually results in more tax being withheld.
W-2 reports annual wages and withheld taxes (employer to employee), while W-4 determines how much tax is withheld from paychecks (employee to employer).
This means you want to get a bigger refund. To get a bigger refund, increase the “Extra withholding” amount on line 4(c) of your W-4.
The post-2020 W-4 does not use a ‘number of deductions.’ Accurate withholding now relies on correctly completing all steps.
Get Help Filling Out Your W4
Filling out your W4 is not just about providing basic information. You need to consider all jobs (for you and your spouse), other income, credits, and deductions, and it can directly affect your tax bill and potential refunds. If you are not sure how to fill out W4 based on your filing status and life circumstances, Legend Fusions is here to assist. Talk to us today and we’ll see how we can help.
Reviewed by:
Hira Asif
Hira Asif, Client Manager (US) at Legend Fusions, brings over 11 years of tax expertise, including 8 years with Ernst & Young. Her work focuses on tax advisory, compliance, and planning for individuals, partnerships, and private equity funds. With a deep knowledge of federal, state, and local tax regulations, Hira is skilled in identifying tax planning opportunities and reviewing corporate and partnership tax returns to optimize compliance and reduce exposures.