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- To receive the largest paycheck you should withhold as little as possible on your W-4.
- When you have multiple jobs or file taxes jointly as a married couple, you may need to adjust your tax withholding to ensure you don’t underpay or overpay taxes.
- The purpose of the form is to provide information to employers about the employee’s tax filing status, number of dependents, and any additional withholding adjustments.
- Over-withholding implies that the government receives an interest-free loan, while under-withholding may lead to a huge amount of tax liability and potential underpayment penalties.
- If you get married, have a baby or take on a second job, you’ll need to adjust your W-4 accordingly.
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IRS Interest, Late Fees, and Penalties
A W-4 form is provided by the IRS and lets your employer know how much to withhold from your pay each pay period based on the withholding tables provided by the IRS. The idea is to get your withholding just right so you don’t owe a fortune in taxes at the end of the year or receive an unusually high refund. This could occur because had too much withheld so the IRS held onto the excess all year and is now returning that money to you—without interest.
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If you want to receive the largest refund, fill out your W-4 and submit it along with your tax payment on time to prevent any penalties. To increase your refund, use line 4(c) to withhold extra from your paycheck each month to receive a larger refund when you file your taxes. Kelly uses the tables on Page 4 of the form to calculate the amount to enter in Subsection 1.
- Events such as divorce, marriage, new dependents, or side gigs can trigger a change in tax liability.
- This section asks for your identifying information and your anticipated tax-filing status.
- One common question that arises is whether updating the W-4 form is necessary on an annual basis.
- It is available for download in PDF format and can be printed and filled out manually.
- With the updated Form W-4, the IRS replaced many of its complex worksheets with questions.
We make money from affiliate bookkeeping and payroll services relationships with companies that we personally believe in. This means that, at no additional cost to you, we may get paid when you click on a link. The challenge isn’t how to make more money, it’s how to make and use money to live a life you love, with time and space for yourself. So without further ado, let’s take a look at how to properly fill out your W-4 tax form for the 2024 tax year.
