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Posted by Cameron (MONEY FORUMS: 5, Answers: 0)
Asked on November 23, 2015 10:40 am
The W-4 form normally has a page of instructions attached that work surprisingly well for most simple tax situations. Just read the form very carefully and follow the instructions exactly and it should tell you how to set up your withholding.
If you have a more complicated tax situation, you may need to adjust your withholding manually so you don't owe taxes, interest and penalties when you file your return. Chances are, you'll have a professional preparing your taxes if your situation is particularly complicated, so it may make sense to ask your preparer for their advice when they give you your prepared return.
The W-4 just tells your employer how much income should be withheld on your behalf. You can download the form and read the instructions from the www.irs.gov. Withholding works as follows: your employer takes an amount from each paycheck and pays the government on your behalf. The W-4 provides information to them to try to get close to the proper amount. In April, you fill out your tax forms to calculate your total tax bill, and you deduct whatever has been withheld for you. Ideally, you don't want to owe money when you file your taxes, but you don't really want a big refund. That means the government has had your money all year and you didn't! If you have income from other sources, like investments or other jobs, or if you have deductions beyond the standard deductions, your withholding may be off (under in the first instance, over in the later).