How Do I Fill Out The New W-4?

One thing you can say for the IRS – they never give up trying to be helpful.  They’ve redesigned the W-4 withholding form, to reduce the complexity and increase the accuracy of employees’ withholding.

It might be easier, but it’s so different from how it used to be, I think it warrants a tutorial, so here it is!  Pour a mug of tea, or a mug of beer, download the form here, and walk through an example of how I would fill this out for my family (with some wee adjustments to make it more interesting – I lead a boring life).  I’m married, filing jointly with my spouse.  We have one son in college, and one daughter, age 15.  Both Ron and I work as employees, and I am also self-employed on the side, as well as the recipient of a pension.  BONUS for you if you guess which pieces are made up!

Step 1 – is pretty much the same as always, and everyone must fill in this step.  NOTE in box (c) that the filing status the employee expects to use must be selected.

Step 2 – use if the employee has more than one job OR is married filing jointly and both spouses work.  There’s an estimating app (there’s an app for that!) at that will give the most accurate amount of any additional tax to be withheld, but option (b) will also work, but might be slightly less accurate.  I’m lazy and don’t want to use the app, so I’ll use option (b).  Here’s how it looks.


Step 3 – Here’s where those kids finally pays off!  So I have one child under 17 and one other dependent over 17, so I fill out step 3 like this.


Step 4 – Since I receive a pension, and know I will owe taxes on that income, I can opt to have more withheld from my paycheck to help overcome that liability.  This is an option to sending in quarterly estimates.  This also works for Social Security, annuities, even self-employment! – basically any other income that you do not have taxes withheld from and want your paycheck withholding to compensate.  For part (b), I will use the standard deduction – not very many taxpayers can itemize any more!  Part ( c) is for any extra you want to withhold for second (or spousal income), extra refund, self-employment – whatever reason you choose!

Step 5 – everyone must complete this step.

Not too bad, right?  Hello???  Are you still with me???

I know it’s kind of different, but hopefully your employees – or you! – will find your withholding more in line with your desires!  Let us know how it works for you!


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