An employee is required to complete a W-4 form, which is used by the person's employer to determine how much money to withhold from a person's paycheck for federal income taxes, explains Intuit Turbo Tax. The form allows employees to claim personal allowances, which can result in less money being withheld from their paycheck. The more allowances a person claims, the less money is withheld. Claiming a larger number of allowances does necessarily mean the person pays less in income taxes. That is determined when the individual files his tax return the following year.
It is important to accurately complete the W-4 form to help prevent a large tax bill at the end of the year, notes Intuit Turbo Tax.Learn more about Taxes