Q:

How should taxpayers complete Form W-4V?

A:

Quick Answer

To fill out Form W-4V, enter your name, Social Security number and address on the form as indicated. Then select the amount you want the IRS to deduct from your benefit. Unless you are receiving unemployment compensation, the allowable amounts as of 2015 are 10 percent, 15 percent, 17 percent or 25 percent of the benefit, the IRS explains.

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Full Answer

If you receive unemployment compensation, the IRS only allows you to deduct 10 percent from your benefit amount. Indicate that you want this amount deducted on line five of the form, states the IRS.

Form W-4V is also known as a Voluntary Withholding Request. Anyone in the United States who receives a nontaxable benefit, such as unemployment compensation, Social Security benefits, commodity credit corporation loans or crop disaster payments, may use it to request that the IRS withhold taxes from his benefit, explains the IRS. This is often the case for people who receive Social Security benefits, which are taxable if the individual's combined income exceeds a certain amount, the Social Security Administration explains. For example, as of tax-year 2014, individuals whose combined income was between $25,000 and $34,000 are liable for federal income tax on up to 50 percent of their Social Security benefits. These individuals often use voluntary withholding to make estimated tax payments, thus avoiding owing the IRS money at the end of the year.

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