How to Fill Out a W 4 form

How to Fill Out a W 4 form

What the hell is a W-4?

On your first day on the new job, (congrats by the way, you nailed that.) you will get papers to fill out, one of them will say W-4 on the top. It will have lots of boxes and letters and look generally intimidating. Fret not! We got you.

The W-4 is the form that tells your employer how much to withhold from your paycheck to pay into your required federal taxes. Yeah, taxes suuuuuuck. However, as a gainfully employed adult, you WILL owe the United States government money every April 14th. The W-4 form determines how much your employer will send to the government on your behalf (and, ultimately, how much you might still owe them on tax day). There will be a few numbers this form will ask, below is how to choose those numbers.

Let’s just rip this band-aid off and dive right in.

Dependent? Does that mean kids?
Dependents can be kids, or any other relative or household member, who “depends” on your income. The thing to know about dependents is if anyone else is claiming you as one. This may be the case when you are kind off on your own, but kind of still getting support from parents (cue college student’s phone call home–don’t ask for money on this call if they say that they are claiming you-it means they’re already spending it on you, it might piss them off). The government won’t let both of you claim that tax benefit, even if you have qualified dependents of your own, the government frowns on the double-dip.

What are Allowances? (And not the good kind you may have gotten as a kid.)
The most important part of the W-4 form is how many “allowances” you are claiming. As a single person with one job, those options range from 0-2. And while this may seem batshit crazy, the smaller the number, the MORE money your employer withholds.

So what’s the point of claiming 0 and giving up all of that money every single paycheck? There’s a very, very good chance you won’t owe the federal government any money in April. In fact, they may give you money back instead (e.g. a tax refund)! Claiming 1 for most single, working adults has a very similar result, except that refund will likely be smaller. And, finally, claiming 2 means essentially they are granting you a lot of “allowances” or ” tax breaks,” leaving more cash in your pocket every time you get paid. AWESOME! But when April rolls around, it is more likely you will owe the government some money.

So what’s the best option?
Of course, nobody can make that decision for you. But get real with yourself. Do you trust that you will have a few hundred dollars available in April to write a check to the government? Then claim 2, and save or invest that extra cash in your paycheck!

However, if your financial confidence is lacking (no shame! We get it.) go with 0. You’ll get a refund check from the IRS a few weeks after you file your taxes in April.

Somewhere in the middle? Claiming 1 allowance is usually a safe bet.

Remember, you can change your W-4 choices anytime! Maybe while you’re in college, money is tight or you need some money budgeting practice. But after you learn how to manage and grow your money, and gain some confidence in your financial skills to pay the bills, you can always change your mind-just ask your HR department for a new W-4 form!

Great job! Now go find the coffee maker, that’s almost as important as taxes.