TAX FORMS

Links to:  Federal W4         IL W4          IRS Tax Withholding Estimator

The Internal Revenue Service requires employers withhold taxes from your salary to ensure that you pay taxes as you earn and don’t have a big tax bill when you file your tax return. Employers rely on the information you provide on the W-4 form you fill out. You need to update the W-4 tax withholding form whenever your tax situation changes.

Payroll Tax Withholding
The amount of money you earn influences paycheck withholding. Another factor is your filing status. A married worker who files a joint tax return has taxes withheld at lower rates than a single person or someone who is married but files separately and makes the same salary. The number of withholding allowances you claim determines how much of your pay is subject to income tax. Your payroll department knows when your income changes but must rely on you to update other information by changing your W-4 form when necessary.

Reasons to Change a W-4
If you get married, you may file a joint tax return with your spouse and can change your federal W-4 status to "married" to take advantage of the lower withholding rate. If you get divorced, you are single again and should change your W-4 status so that enough tax is taken out of your pay. A birth or adoption means you can claim at least one additional withholding allowance. As children get older, eligibility for withholding allowances for child care and the Child Tax Credit go away. Changes in non-wage income, such as dividend earnings, may make altering your W-4 useful. You can ask an employer to withhold an extra amount to cover taxes on non-wage income instead of filing estimated tax returns. Individuals who qualify to be tax exempt must submit updated W-4s each year even if there is no change, because exemptions expire every February.

The Federal W-4 form has changed
In the past, employees could claim allowances on their W-4 to lower the amount of federal income tax withheld from their wages. The more withholding allowances an employee claimed, the less their employer would withhold from their paychecks. However, the 2017 Tax Cuts and Jobs Act overhauled a lot of tax rules, including doing away with personal exemptions. That prompted the IRS to change the W-4 form.

The new W-4, introduced in 2020, still asks for basic personal information but no longer asks for a number of allowances. Now, employees who want to lower their tax withholding must claim dependents or use a deductions worksheet.

How To Fill Out The New Federal W-4 Form
Form W-4 is available on the IRS website. Here's how to complete the steps that apply to your situation.

Step 1: Personal information
Enter your name, address, Social Security number and tax-filing status.

Step 2: Account for multiple jobs
If you have more than one job, or you file jointly and your spouse works, follow the instructions below to get more accurate withholding.

If you’re single and have multiple jobs, or you’re married and file jointly and both of you work:

You typically have to have a W-4 on file for each job.

For the highest paying job’s W-4, fill out steps 2 to 4(b) of the W-4. Leave those steps blank on the W-4s for the other jobs.

If you’re married and filing jointly, and you both earn about the same amount, you can check a box indicating as much. The trick: Both spouses need to do that on each of their W-4s.

If you don’t want to reveal to your employer that you have a second job, or that you get income from other non-job sources, you have a few options:

On line 4(c), you can instruct your employer to withhold an extra amount of tax from your paycheck.

Alternatively, don’t factor the extra income into your W-4. Instead of having the tax come directly out of your paycheck, send estimated quarterly tax payments to the IRS yourself instead.

Step 3: Claim dependents, including children
If your total income is under $200,000 (or $400,000 if filing jointly), you can enter how many children and dependents you have and multiply them by the credit amount. (See the rules about the child tax credit and for when you can claim a tax dependent.)

Step 4: Refine your withholdings
If you want extra tax withheld or expect to claim deductions other than the standard deduction when you do your taxes, you can note that.

Step 5: Sign and date your W-4
Once completed, give the form to your employer's human resources or payroll team.