The purpose of Tax Form W-4 is simple as it is used by your employer to withhold the proper amount of federal income tax from your paycheck. The IRS recommends that employees submit a new W-4 tax form each year, or any time their personal or financial situation changes. Of course, this is required upon being hired.<\/p>\n
Withholding tax<\/strong><\/em> (also known as \u201cpayroll withholding\u201d) is essentially income tax that is withheld from your wages and sent directly to the IRS by your employer. In other words, it\u2019s like a credit against the income taxes that you must pay for the year.<\/p>\n By subtracting this money from each paycheck that you receive, the IRS is basically withholding your anticipated tax payment as you earn it ? sometimes called \u201cpay-as-you-earn\u201d taxation.<\/p>\n In general, the more money that is withheld from your wages throughout the year, the greater your tax refund may be because you\u2019ve essentially overpaid the IRS. While everyone likes to get a tax refund, you should keep in mind that you\u2019re only getting back the money you earned that year. A tax refund is basically an interest-free loan that you gave to the IRS!<\/p>\n On the other hand, if too little is withheld from your wages, you will likely owe more tax at the end of the year because you have underpaid the IRS. Additionally, you may be subject to penalties and interest charges for under-withholding.<\/p>\n For most taxpayers, it\u2019s recommended that you try to match your withholding tax as close to your actual tax liability as possible. While you cannot avoid withholding tax altogether, you can control the amount that is withheld from each paycheck when you fill out your W-4 form.<\/p>\n","protected":false},"excerpt":{"rendered":" The purpose of Tax Form W-4 is simple as it is used by your employer to withhold the proper amount of federal income tax from your paycheck. The IRS recommends that employees submit a new W-4 tax form each year, or any time their personal or financial situation changes. Of course, this is required upon […]<\/p>\n","protected":false},"author":1,"featured_media":7422,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[11],"tags":[41],"class_list":["post-1775","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-forms","tag-efile"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/1775","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/comments?post=1775"}],"version-history":[{"count":3,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/1775\/revisions"}],"predecessor-version":[{"id":8679,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/1775\/revisions\/8679"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media\/7422"}],"wp:attachment":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media?parent=1775"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/categories?post=1775"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/tags?post=1775"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Managing Your Withholding Tax<\/h2>\n