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How To Fill Out Form W-4 for Federal Tax Withholding

This article reviews each section of the new W-4 Federal Tax Withholding form

The IRS issued a new version of Form W-4 to improve the accuracy of taxes withheld each year. Whether updating withholdings, or completing a new form, the new version must be used.

The new Form W-4 has a five step process for determining employee withholdings.

  • Step 1 - Employee's Personal Information and anticipated filing status (single, married or head of household).

Steps 2 - 4 are optional and should be completed only if applicable:

  • Step 2 - Multiple Jobs or Spouse Works should be completed only if (1) you hold more than one job at a time or (2) are married filing jointly and your spouse also works
  • Step 3 - Provides instructions for determining the amount of the child tax credit and the credit for other dependents that you may be able to claim when you file your tax return.
  • Step 4 - To capture any additional withholdings such as (1) Other Income (not from jobs) i.e. dividends, investments, retirement income. (2) Deductions, other than standard deductions to reduce withholding amount. (3) Extra withholdings for any additional tax requested to be withheld. 
  • Step 5 - Signature is required

To update the withholdings in the system

  • Select Employees from the menu
  • Select the name of the employee 
  • Scroll down to the Payroll section of the employee profile to Tax Info
  • Hover over the current entry (defaults to W-2 Employee)
  • Select the pencil icon
  • A drawer on the right side of the screen will appear