Are you employed by a company? Then you are required to fill out tax form W-4. This form lets your employee know exactly how much they need to withhold from your paycheck for taxes. Businesses are required to keep employees’ W-4 IRS tax forms at all times. If you haven’t filled one out at your place of employment ask about it now.
Businesses are not required to file the W-4 IRS tax forms in order to start withholding funds for taxes. But they do provide proof that the company is withholding money from employee paychecks for taxes. Further, a company is only required to submit these IRS tax forms to the IRS if requested.
When you fill out your W-4 IRS tax forms you will figure out the number of allowances based on your tax situation. Do you have dependents? Are you married? Are you the head of the household? Do you have child-care payments worth over $1,500? The W-4 IRS tax forms will ask you all these questions in order to help you determine how much money should be withheld from your paycheck.
The information from your employer and the info you claim on the 1040 IRS tax forms should match up. Often, this isn’t the case. This leads to refunds or payments due come April 15th.
For example, the allowances on the W-4 IRS tax forms don’t always equal the number of exemptions on the 1040 tax forms. The W-4 tax forms have an allowance for having only one employer but the 1040 form leaves this out. It’s a point of confusion with people everywhere. People with more than one employer do have a few options available to them.
Some people forfeit the allowance for both employers. Some keep the allowance with one employer and forfeit two allowances with the other employer. In this case, you should choose the employer that has the highest salary. You can possibly get the best ratio this way. This may result in no payments or refunds come tax filing time.
Sometimes enough money isn’t withheld from your paychecks during the year. You can add any amount you want on the W-4 IRS tax forms to fix this. You can send payments directly to the IRS if you’d rather do it yourself. Do you have extra income? Maybe some investments? You may be required to send these payments in yourself, despite any allowances you made have claimed on W-4 IRS tax forms from various employers.