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What is a W-4 for?

April 26, 2017Finance forms income procedures tax W-4 W4

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What is a W-4 for?

1 Answer

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Form W-4 is a component of the federal income tax system, which is administered by the Internal Revenue Service (IRS). It is used by employees to control whether they will receive a refund during federal tax return season.General PurposeA W-4, which can be obtained from the IRS website, is used to let your employer know how much income tax should be withheld from each of your paychecks.SectionsThe W-4 is divided into two sections. The first is a worksheet used by employees to determine how many withholding allowances they should use. The second is where the withholding information goes.Tax ExemptionLine 7 of the W-4 allows low-income people to claim complete exemption from tax withholding. It should only be used if you make less than the individual standard deduction on IRS Form 1040.AllowancesFor each allowance you take on the W-4, the amount of income tax withheld from each paycheck decreases by a certain percentage.