W-4 is an important form that each employee must fill out when hiring to work with any company. You might forget, but this document ensures you pay the correct amount of tax on your wages. If not, it would be more likely for you to spend too much or too little in taxes. With that said, here are a few important things you should know about the W-4 form.
What Is The W-4 Form?
The main purpose of this document is for an employee to provide personal information about themselves so that their employers can determine how much tax should be withheld from each paycheck. In other words, it helps figure out what amount should be deducted from the employee's paycheck.
Why Is It Important?
From taxes withheld, you can expect to have a refund or a balance due come tax season if your employer withholds too much money throughout the year. If they don't withhold enough, then at the end of the year, instead of receiving a nice fat check from Uncle Sam, you will probably owe more than what he expects. To avoid this scenario, filing a W-4 form on time with your employer is extremely important for each employee. In addition to that, filing out this document correctly will help ensure that an employee does not pay too much in taxes which can create problems later. And on top of all those benefits, employers prefer their employees to file this form to avoid problems with the IRS.
How to Fill Out a W-4 Form?
When filling out a W-4 form, you have two options: you can complete the online version or the old fashion way by printing it out and filling it down on paper. The first step is making sure that all your information is correct on your W-4 form. Depending on how many allowances you would like to claim will depend from there and if you are filing as single or married. You may claim more allowances if you want to get more of your earnings throughout the year, but remember, it could cause problems for you to come tax season. In other words, make sure to take the time to fill out your W-4 form carefully, so you don't have any problems come tax season.
Remember, filing a W-4 Form is very important and helps ensure employees pay the correct tax on their wages. But in addition to that, it allows employers to avoid problems with the IRS, and employees get refunds if their employer withholds too much money throughout the year. So for all those people who think they can just file this document once and ignore it for years after that, might want to think again because according to IRS: "If you find yourself in a position where information on your W-4 does not accurately reflect your current situation, then complete a new W-4 and give it to your employer.”
Does Being Self-Employed Require a W-4 Form?
If you are self-employed, you need to follow different instructions when filling out your W-4 form. This document is very helpful for those who have regular jobs and those who are self-employed. But if you are doing work under the table without having an employer, then the answer would be no because that is considered illegal activity, and it's highly recommended not to do that. Having said all that, filling out this document will ensure you avoid any issues with the IRS come tax season. If not, then at least take time out of your day to go online and file it away, so it should be available on their website whenever needed. Although, if there are any problems, an employer might not be willing to work with you, which would cause you more issues than what was originally planned.
Although it can be quite difficult sometimes to figure out how much should be withheld from each paycheck, using the W-4 form will ensure that all your information is correct. There's no way of telling what other issues may occur come tax season. With that said, plan accordingly ahead of time before things get complicated, especially when filing this document for employers will help them avoid having any problems with the IRS come tax season. So whether you are self-employed or have a regular job, make sure to take advantage of the W-4 Form and eliminate any stress that may be caused throughout the year so you can avoid any issues come tax season.
Takeaway:
In conclusion, filing a W-4 form correctly helps employees ensure that they are claiming all their allowances properly and working with employers to avoid having problems with the IRS come tax season. In addition, employers prefer their employees to file this document out appropriately because it will help them avoid problems with the IRS and make sure everything is correct for each employee throughout the year. With all those benefits in mind, consider taking your time out of your day and ensuring your information is complete and correct, so you won't have any problems during tax season.
