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| Cathy A. Robinson, CPA Senior Manager robinson@hwco.com |
So you are starting a new job. You will have many forms to fill out the first day including a W-4. Do you know why you complete a W-4? Not to worry, we are here to help.
What exactly is a W-4?
Simply, it is used by your employer to withhold the
proper amount of Federal income tax from your pay.
Why fill out a W-4?
Completing a W-4 accurately can help save you money in
two ways. The first way is it helps to prevent you from overpaying your
taxes. Doing this can mean putting more
money in your pocket throughout the year. The second way is to ensure you do not
owe anything at tax time.
If you are single, the W-4 is straight forward and easy
to complete. For those who are married or have more than one job, the process
becomes more complex. The W-4 includes a
series of worksheets to help guide you through this process. There are also worksheets included for those
who have a spouse working as well or for those who have additional
employment.
It is important to keep in mind as well the higher the
exemption number claimed, the higher the amount of your net pay. The tradeoff,
however, there will be less withholding
deducted from your pay, and you could owe on April 15th.
Remember, ask your tax professional should you have any
questions in regards to filling out the W-4 or the tax worksheets attached to
it.
