The Most Common W-4 Questions

Your W-4 form. In many cases, you probably don’t even think about it past your first day of work. But then something happens - you get married, start a new job, have a baby - and you need to take a closer look. That’s when your mind starts scrambling with questions.

Below, you’ll find the top questions we’re asked about the 2023 Federal Form W-4.

What is Form W-4?

This is a federal tax form you fill out for your employer that states how much income tax you want withheld from your paycheck. States have separate withholding forms.

What is my filing status?

Employers look at your filing status to determine your correct tax filing requirements, standard deductions, and more. You have a few options for your filing status that the IRS breaks down for you.

Can I change my W-4 after starting a new job?

Yes! Usually, people change their W-4 forms when a significant life event occurs, for example getting married or having a baby.

I’m an independent contractor, do I need to submit a W-4?

No, independent contractors do not need to file a W-4. For more information check out, What is the Difference Between a 1099-MISC Contractor and a W-2 Employee?

How much should I claim for dependents?

The old W-4 form (pre-2020) used to ask for just a number of dependents. The new W4 asks for a dollar amount. Here’s how to calculate it.

If your income will be < $200,000 (or $400,000 if married):
# of children under 17 * $2,000
# of other dependents * $500
Add up the total.

If you make more than $200,000 (or $400,000 if married), you will leave this as $0.

What happens if I claim deductions?

In general, the more Deductions you claim, the less federal income tax will be withheld from your paycheck, and increase the amount of your paycheck. If you do not withhold enough income tax you are expected to pay the government what you owe. You may also be forced to pay a penalty.

What happens if I claim extra withholding?

The more Extra Withholding you claim, the more federal income tax will be withheld from your paycheck, and reduce the amount of your paycheck. If you withhold too much income tax you are entitled to a tax refund.

Am I exempt from tax withholding?

You can use the W-4 to claim exempt from withholding. This means your employer will not withhold any tax from your paycheck. You may claim exempt if you don’t expect to incur a tax liability for the current year, and did not incur a tax liability in the previous year.

Do I have to fill out a new W-4 each year?

This one is up to you. Normally, you don’t have to fill out a new W-4 unless you change jobs, or a life event happens that will change your filing status or dependents amount.

How do I fill out my W-4?

PaycheckCity’s W-4 Assistant can help you fill out your W-4 with an easy step-by-step wizard.

Employer Questions

As an employer, you have your own set of questions regarding Form W-4.
Depending on your employee’s familiarity, the process of completing the form can be confusing or a breeze. Every employee has their own experience and scenario to report on his or her W-4. It’s important to get withholding information as accurate as possible. The W-4 can have a major impact on your employees’ finances and therefore their quality of life.

Below are a few questions you might have when it comes to your employee’s W-4. For more help running payroll and calculating your taxes, try a PaycheckCity Payroll free 14-day trial!

When does my employee have to fill out a W-4?

Your employee should fill out another W-4 when a life event, such as a marriage or birth of a child occurs. Your employee can complete a new form when he or she feels like his or her withholding is not accurate.

How do I help my employees with their W-4s?

If you want to help your employees, you have several options. For one, the IRS provides instructions on completing the form. You can also walk your employees through the language used in the W-4. For example, explain allowances, filing status, and dependents.

What do I do when my employees want to change their withholding or dependents amount?

No problem! Encourage your employees to submit another W-4 reflecting their scenario.

What do I do with my employee’s W-4 after completion?

After your employee has completed his or her W-4 make sure to collect it and store in a safe place. Businesses are required to hold on to each employee’s W-4 for up to four years.