When you start a new job, you tend to believe that the person giving you all the paperwork is telling you the truth, and most of the time they are. However, we’ve noticed throughout the years that there are certain beliefs about withholding forms that are just not true! Whether you’re an employee, or a payroll manager, you need to stop believing these 8 myths about withholding forms:
- You must fill out your withholding form with a pen and ink. We’ve checked this one more times than we can count, and yes – you can legally fill out your Form W-4 online, and sign with an electronic signature. The form still has to be completed with your name, social security number, and other personal information to be considered complete.
- You can update your form without seeing a perjury or instruction statement. If you don’t have to verify that you aren’t committing perjury, or your form comes with no instructions, it’s not legitimate. These two items are absolutely required.
- Online State Forms aren’t accepted. See #1 – you can sign the form electronically, and complete the rest of the form electronically in all 50 states. If you’re looking for a way to ease the burden of paper withholding forms, consider Symmetry Payroll Forms.
- Online Federal Forms aren’t accepted. Again, see #1. Many companies now complete the entire forms process online, allowing for less error, better readability, and better record keeping.
- Auditors never look for withholding form compliance. While we hope that you never get audited, it’s important to remember that employers are responsible for retaining all Forms W-4 that are submitted by an employee no less than four years from the date taxes were due or paid based on the Form W-4. That means you have to have them if you ever get audited.
- Withholding forms never change. Withholding forms can change depending on laws that are passed. The way you fill out your withholding form will change as your life changes as well. Whether you’re getting married, having a child, or experiencing another life-changing event, you should make sure your form is updated. Similarly, pay attention to what’s going on in your state and your country, and update your forms as the laws change.
- Everyone working in America has to complete a Federal W-4. While this might sound like a trick question, there are some exceptions to filling out the Form W-4. Two of these exceptions include if you fill out Form 673 or Form 8233 instead. The United States also has various agreements and treaties in place that discuss withholding tax behavior for specific situations.
- You have to complete a new withholding form every year. If none of your allowances or withholding amounts need to change, you do not need to update your Form W-4. If you do need to change your Form W-4, make sure you know how many allowances you should claim.
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These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.