How to Fill Out Form W-4: A Step-by-Step Guide

• You start a new job (you must complete one; without it you are withheld as single with no adjustments).
• You marry, divorce, or have or adopt a child.
• You or your spouse take a second job or the other spouse starts or stops working.
• You start meaningful side income — freelancing, rentals, investment income.
• Last year you owed a large balance or got a refund far bigger than you wanted.

You can submit a new W-4 any time; most employers process it within one or two pay cycles.

Enter your name, address and Social Security number, then check one filing status: Single or Married filing separately; Married filing jointly (or qualifying surviving spouse); or Head of household. The filing status drives which standard deduction and bracket table the payroll system uses. Head of household generally applies only if you are unmarried and pay more than half the cost of keeping up a home for a qualifying person.

If you complete only Step 1 and sign Step 5, your employer withholds as if this job is your only income and you take the standard deduction. For many single people with one job, that is enough.

This is the step people skip most often and the main reason two-earner couples owe money in April. Each employer's payroll assumes its paycheck is your only income, so each one applies the full standard deduction and the lowest brackets. Combined, too little is withheld. You have three options:

• (a) IRS Tax Withholding Estimator at irs.gov — the most accurate; it gives you an extra amount to put in Step 4(c).
• (b) Multiple Jobs Worksheet on page 3 of the form — uses a table based on both salaries.
• (c) Check the box — on the W-4 for both jobs. Works well when the two jobs pay roughly the same; it splits the standard deduction and brackets in half.

Complete Steps 3 and 4(b) on only one W-4 — usually the highest-paying job — or deductions and credits are counted twice.

If your income is under the threshold printed on the form ($200,000, or $400,000 if married filing jointly), multiply the number of qualifying children under 17 by the child tax credit amount and other dependents by the credit for other dependents ($500 each), then add any other credits you expect, such as education credits. The total reduces withholding dollar for dollar over the year. Use the per-child amount printed on the current form, since the credit has changed over the years.

An unsigned W-4 is invalid, and your employer will withhold as if you never submitted one.

Ana earns $85,000 and Ben earns $60,000; they file jointly and have one child. If both check only "Married filing jointly" and nothing else, each payroll system gives a full joint standard deduction and the 10% and 12% brackets to its own salary — roughly double what the couple is entitled to. The result is often a balance due of a couple of thousand dollars. The fix: both check the Step 2(c) box (salaries are close enough), and Ana alone claims the child in Step 3.

You may write "Exempt" only if you had no federal tax liability last year and expect none this year. An exempt W-4 expires and must be renewed by mid-February each year. Claiming it without qualifying can lead to penalties.

• Both spouses claiming the same children in Step 3.
• Ignoring Step 2 with two jobs.
• Forgetting to update after a raise, bonus or new side gig.
• Assuming a big refund is a good thing — it means you overpaid all year.
• Forgetting state withholding: many states have their own W-4 equivalent.