Ten Small Cities to Start a Business in 2023
Are you starting a new business? Have you thought about where you would like to start a business? Learn more about the best small cities to start a business.
The Form W-4 is a deceivingly simple document that creates confusion for employees at all levels of an organization. In particular, during January, many employees are asking whether or not they have to complete a new W-4 at the start of every year. AskCPASam debunks this payroll myth.
The Form W-4 is a deceivingly simple document that creates confusion for employees at all levels of an organization. In particular, during January, many employees are asking whether or not they have to complete a new W-4 at the start of every year. The Form W-4 is used by employers to determine the amount of taxes to withhold from an employee’s paycheck. In reality, an employee never has to complete a W-4 and provide it to his or her employer. In the case where a company does not have a W-4 on file for an employee, the employer will simply set the employee’s withholding at the highest levels provided for in the withholding tables. That is, the employer will designate the employee as having a filing status of single with zero exemptions. For many employees who do not itemize and who do not have any dependents, these settings may be completely appropriate regardless of whether they are set automatically by the employer or set based on a completed Form W-4 from the employee. However, for individuals wishing to execute a more customized and sound financial plan, they should submit a Form W-4 with settings and numbers agreed upon by their accountant or tax adviser. That being said, once an employer has an employee’s Form W-4 on file, there are only two reasons to update it. First, if the employee’s tax situation changes, he or she needs to complete a new form as soon as possible. This could include occasions such as marriage or divorce, birth of a child, a home purchase, or even a change of address. All of these situations can affect the number of exemptions you claim. If your tax situation does not change, you don’t need to submit a new W-4. It’s that simple!The second reason for an employee to update his or her Form W-4 is where most of the confusion about annual updating actually exists. Individuals who claim exempt on their Form W-4 must submit a new one by February 15 each year if they wish to claim exempt for the current tax year. If the employee does not submit a new form by that date, the employer is to act as if no W-4 is on file and thus withhold at the single filing status with no exemptions, as mentioned earlier.
If you do find yourself needing to fill out a new Form W-4, you can find all federal, state, and local withholding forms in Payroll Resources.
Are you starting a new business? Have you thought about where you would like to start a business? Learn more about the best small cities to start a business.
Your filing status is perhaps the most important piece of information when it comes to tax withholding. Learn which filing status applies to you.
How often should you submit a new W-4? What is your filing status? In this article, we break down some of the most common W-4 questions.