What Are Some Tips for Completing a W-4 Tax Form?


Quick Answer

Tips for completing the W-4 tax form relate to exemption considerations, eligible allowances, personal allowance worksheets, filing for married couples and filing for new graduates, notes Kiplinger. Employers utilize Form W-4 to determine how much to withhold from an employee's pay check.

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Full Answer

Taxpayers owing no tax in the previous year and expectations of no tax liability in the current year are exempt from withholding, states Kiplinger. However, taxpayers must still complete certain lines on the form and submit to an employer. Without submitting any form W-4 to an employer, an employer is responsible for withholding at the highest rate.

Allowances determine how much is withheld from an employees pay check. The general rule states that the greater the number of allowances, the less money withheld from each pay check. Form W-4 offers three worksheets to determine the appropriate allowance figure, notes Kiplinger.

Married couples who file a joint return can take advantage of the tax treatment by filling out a single set of W-4 worksheets to determine the total number of eligible allowances, states Kiplinger. The couple can then divide the allowances evenly. Taking these precautionary measures can eliminate tax liability at the end of the year.

New employees can take advantage of the part-year method. This method sets withholding according to what the new employee actually earns. This approach is more favorable since withholding is not based on a full month's compensation, reports Kiplinger.

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