What is a W-4 Form?
A W-4 form is a form that a person fills out to tell their employer how much to withhold from the person’s paycheck for federal income tax. The person includes information about their marital status[if married and both work] and other withholding allowances on this form.
A W-4 form calculates an individual’s federal income tax withholding based on their personal information and the number of allowances they claim.
The W-4 can be changed at any time for any reason, or when there is a change in marital status, number of dependents, or other life events.
Who Needs a W-4?
As a married person, you might be wondering what type of tax form you need to file. A W-4 is the tax form that everyone must fill out in order to get paid.
The form determines how much of your income will be withheld for federal taxes. So if for example, you are married and your spouse also works, then one (or both) of you will need to fill out a W-4 form so that the right amount is being taken out of each paycheck.
Marriage Status vs single and Income on a W-4 Form
Married people are eligible for additional tax deductions. Single employees can claim themselves as head of household if they are living with a qualifying person.
Married people are eligible for additional tax deductions, single employees can claim themselves as head of household if they are living with a qualifying person.
On the W-4 (Single, Married filing separately, Married filing jointly, and Qualifying widow(er)), there are three boxes that correspond with the three types of filers: Single or Married filing separately; Married filing jointly; or Qualifying Widow(er).
The U.S. Internal Revenue Service’s tax form, 1040, separates the different types of taxes by their individual specifications. To complete the “Single” form or “Married filing separately,” for example, you must select the appropriate check box for which bracket you fall under to indicate your status.
When you file your W-4, make sure to check the appropriate box which will determine the standard deduction and income rate. All else being equal, married taxpayers who plan to file jointly will have less withheld than single taxpayers.
A married filing jointly or married filing separately status will usually result in a lower total tax owed then any of the other statuses.
How to Fill out W-4 Form for Married Couples When Both are Working
Step 1a. Enter your personal information
To get the most out of the course, please make sure you enter correct personal information in the w-4. This includes your full name, social security number, date of birth, and current address.
The w-4 is a form that most employers require employees to fill out upon hiring. Employees are required to provide their social security number, date of birth, name and address on the form. These are used by employers to report income taxes withheld from their wages directly to IRS.
1b. Social security number
A social security number is an identifier for American citizens, issued by the United States Social Security Administration. This number is used for income taxes.
The purpose of the W-4 form is to establish personal exemptions and federal withholding allowances which are used to calculate an individual’s annual tax liability.
1c. Choose of your selection criteria
It is important to understand the difference between these filing statuses in order to decide which one is best for you.
Married people qualify as “married filing jointly” if they are married and both of them are both legally able to sign tax documents.
Single people can be “single” or “head of household”, but not “married filing jointly”. A single person qualifies as head of household if they are unmarried and their spouse died during the previous year. Single people who qualify as head of household can claim an exemption for their dependents.
Qualifying for head of household status can also have a significant impact on your tax liability. Being head of household usually offers benefits in terms of lower federal income tax rates and increased eligibility for certain deductions or credits.
Step 2 Multiple Jobs or Spouse Works
The IRS has a strict definition of “joint return” and “head of household” for the purpose of determining whether you should use the married filing separately or jointly status.
If you and your spouse lived apart during the whole year and both got income from W-2 jobs, use the married filing separately status on your tax returns. If you’re not sure, consult a tax professional.
The message before step two gives guidance on exemptions for withholding. If your employee asks, point them in the direction of this message where they can find more information.
This message also instructs anyone who does not need to fill out steps 2 through 4 to complete step 5.
For Step 2, employees can either (a) do something completely different form this page. Option (b) will require them to leave this page, but option (c) is conveniently displayed here on this same page for them to follow.
The IRS has said that Option a will provide the best accuracy and privacy out of the three because it runs all the computations for Form W-4.
Option (a) is more accurate but will require you to manually enter data. Option (b) also provides accuracy but requires manual work, and (c) is the least accurate since it assumes the jobs have similar pay, but it’s the easiest to complete.
Step 3 Claim Dependents
In order for someone to claim a dependent on their W-4, they must meet three qualifications:
1) they must have provided more than half of the dependent’s financial support;
2) the dependent must not be filing a joint tax return; and
3) the dependent cannot file as head of household.
Claiming dependents on the W-4 form will give you a tax deduction. It’s important to note, however, that some employers might not be willing to do this automatically for you.
If you are single, you can get the child credit if your total income is $200k or less ($400k if married). Employees who need more information about it should go to IRS Publication 972.
Step 4 Other adjustment
This optional section includes areas to consider when determining your withholding. They include:
(a) Other income (not from jobs)
The Other Income section is for you to report any income not from a job. Examples of other income might include interest from loans or from stocks, gifts, inheritances, prizes, self-employment earnings, rental property income, royalties.
Income not from a job can be reported on the other income line of the W-4. If you have other types of income not from a job that should be reported on your taxes then it should be reported in this section instead of as wages.
(b) Deductions
This section is for normal deduction instead of standard deductions
This includes all possible deductions like mortgage interest and donations. The standard deduction can reduce a person’s gross income and cut their taxable income in general.
The standard deduction is the newer and in some cases, more desirable method of offering tax savings to taxpayers.
As one’s income level goes up, the greater the benefit will be in utilizing this type of deduction; there is a limit to how much one can contribute. For married couples filing jointly, the threshold is $25100; for single taxpayers it’s $12000 and for heads of household it’s $18750.(2021 standard deductions)
(c) Extra withholding
The new form will provide instructions for taxpayers who want to either increase or decrease the number of withholding allowances they claim. The instructions on the W-4 will also help taxpayers see whether they should file a new Form W-4.
Step 5 Sign of the candidate
Remember that without your signature this document is invalid. Your employer would see the new W-4 selections as invalid and will calculate your withholding as “Single.”
Exemptions on a W-4 Form for Employees Who are Married or Single Parents with Dependents
In order to calculate exemptions on a W-4 form for employees who are married or single parents with dependents, you must first determine if they are eligible for the exemption. If the employee is married and has a spouse that is not employed, then they can choose to take an exemption for their spouse.
If the employee has children and that is their only dependent, then they can take an exemption for themselves and their children. However, if they have an elderly parent living with them as a dependent, then the employee cannot take an exemption for themselves or their children.
5 important part to know for W4 form if Married and Both Work
Part 1 – Income
Income is defined as all money received by an individual from all sources in a year. The most common form of income that individuals receive is from their job or from investments such as stocks and bonds. Income can also come from other sources such as spousal support, retirement funds, unemployment benefits, bonus payments, and child support.
These are some factors that affect how much an individual receives in income each year: hours worked per week, age of worker (younger workers will typically earn less than older workers), profession.
Part 2 – Federal Withholding Allowances
The Federal Withholding Allowances is an important number that helps companies calculate the tax withholding for their employees. This is done to ensure that the employee’s take-home pay is accurate and they are not overpaying or underpaying taxes throughout the year. It can be calculated by taking into account different factors like marital status, age, deductions, and allowances.
Part 3 – State Income Tax Withholding
State withholding tax is the amount of money that an employer has to withhold for the State in order to implement the state’s income tax. The employer will withhold this percentage (percent) based on the employee’s wages and will keep this percentage in a trust fund until it is time for the State to collect these funds.
This section talks about state withholding tax, which is a way for states to get their share of taxes from employees’ wages. States are required by law to have employers withhold taxes from workers’ paychecks, so they can get their share of taxes from businesses.
Part 4 – Additional Information You May Need to Provide for Your Employer
As a married person, you will need to furnish your spouse’s social security number if the spouse is not working and does not have a social security number.
If you are planning to work abroad your spouse will need to provide their social security number for taxation purposes.
You may need to provide additional information for your employer because of the following reasons:
- you are married and your spouse works;
- you are self-employed;
- you are an alien who is legally residing in the U.S.;
- you are a widow(er) with dependent child(ren); or
- you live outside of the United States.
If any of these apply to you, then here is what will be needed:
- if married, provide spouse’s social security number (use spouse’s SSN, not yours)
- if self employed, please provide your business name and EIN- if living outside the U.S., please provide your country of residence.
