What is a Form W4 or Tax Withholding?

We at eFile.com understand that the Form W-4 can be confusing in determining the correct tax withholding. As a result, we have created various free estimators and tools to help taxpayers complete a W-4 online without having extensive tax knowledge. Are you starting a new job or has your life, income, etc. changed compared to last year? If so, find the W-4 answers here.

Watch this W-4 video

How to complete a W-4?

Types of W4 Forms

W4 Tax Withholding Calculator

W-4 withholding examples

Is a Large Tax Refund a Self Imposted Penalty?

Create, Complete your Form W-4

You have 2 options to create a W-4. The Form Creator guides you through to just fill out a Form W-4 without additional calculations. Use the PAYucator and enter your paycheck information and your W-4 will be created based on that. Make adjustments based on your tax goal.

  • Form W-4 Creator:  Create, Fill-out Form W-4: Online tool to complete, fill-out a W-4 without any additional calculations, suggestions.
  • PAYucator based W-4: Create Form W-4 based on your Paycheck. Complete, adjust your paycheck and the tool will create a Form W-4 based on your paycheck results.

The tax refund you may have received with your last tax return is not free government money but in most cases the result of too much in per paycheck tax withholding, in other words it's your money. Keep more each paycheck by optimizing your tax withholding via Form W4. Use this extra money now and pay off debts instead of giving up this money interest free to the government, only to get it back in the form of a refund check next April.

Form W-4 Overview

About the W-4
What does a Form W-4 look like?
A new W-4 is released in January every year for the tax year. That does not mean you should complete a new W-4 each year. See the image below or click and view, download Form W-4 as a PDF file.
W-4 Form

Click on image to enlarge

What does W-4 stand for?
A pack of 4 waffles, or a brand of washing machines, or a herd of four warthogs?
Well, it's none of the above. It has to do with IRS paycheck tax withholding and it's most likely that the "W" in W4 or W-4 stands for "withhold" or "withholding" (to take out), but we do not know what the "4" means in W-4.
What does a Form W-4 do?
A W-4 determines a taxpayer's IRS Tax Withholding amount for a given paycheck and pay period. The W-4 form is a tax withholding planning form, thus you have some flexibility in managing your tax withholding goals. For example, on the date you prepare the W-4, your filling status might be different than when you prepare your tax return next year. Thus, you can plan for this change now via your W-4. You can increase tax deductions in order to reduce your tax withholding.
When should you complete a new Form W4?
A: At the beginning of a new job.
B: When your life has changed or will change, e.g. you might get married, or divorced by the end of year.
C: You might be able to claim a dependent on your next tax return.
D: Your total taxable income for the year might change, e.g. decrease or increase.
Important: You do not have to wait until any of the events B, C, or D take place, but you can complete a W-4 in preparation of these events, as they might change the results of your next tax return.
Is this the way you feel?
"I've been afraid of owing taxes when I file, but then I also get scared that I withhold too much taxes each paycheck. As a result, I always withheld too much in taxes that resulted in a refund."

Sam in California

How often can you complete and submit a Form W-4?
At any point or as often as you wish during your employment.
Most of the time a W-4 is submitted at the beginning of any new job or employment.
Update your form W4 as the result of a life changing event: marriage, divorce, change of dependents, expected increase or reduction of annual income.
Will the form W4 provide the actual tax withholding dollar amount for each pay period?
The form itself will not provide this. You can however use the eFile.com Paycheck based W-4 calculator to find out what your IRS tax withholding would be based on your W-4 entries, e.g. filing status, dependents, deductions, etc.
Or, you monitor your first paycheck after you have submitted the new W-4 form to your employer.
Even if you know the per paycheck tax withholding amount you do not know how it would affect your tax return. For that, we suggest you use the Tax Return Estimator and enter the annual paycheck based tax withholding amount and your annual income and you can estimate if you can expect a tax refund or if you might owe taxes.
How do you know what to enter on a W-4?
Taxpayer, employee information: Name, Address, SSN, Signature and Date.
Tax return related information: Filing status, number of Dependents or other Dependents, Deductions. Click on each link to learn more about each field. Keep in mind, the W-4 is a planning tool, and if you complete the form during the year you could enter the information that might apply to you by the end of the year. For example, you might not be married when you complete the form, but you might be married by the end of the year, thus you would file your tax return under the filing status married. The same might apply for Dependent(s) or Deductions.
Use any of these W-4 tools: W-4 Creator or Paycheck based W-4 or Tax Return Estimator.
How to complete a W4 between now and the end of 2023.
Example: Your 2022 Tax Return showed a $1,200 refund and your 2022 income and deduction situation is not changing. Take a look at your last paycheck, take the tax withholding amount, and decrease your withholding by $200 (monthly pay period) or $100 (bi-weekly pay period) between the remaining months of May through December 31. As a result, you should get a smaller refund in 2023 and not owe taxes, but increase your paycheck per pay period. Do the reverse if you owed taxes on your 2022 Tax Return.
How to calculate or estimate the amount of taxes to withhold with each paycheck?
A: For a high level annual income based estimate use the Income Tax Rate Calculator
B: For a paycheck based estimate use Paycheck Calculator
C: For the most comprehensive, detailed calculation estimate your 2023 Tax Return first.
D: To just fill out and complete the W-4 without any prior estimate use the W-4 creator tool.
D: Estimate your state income taxes before you select the state tax withholding form.
F: Discuss your W-4 plans for free with a Taxpert® now.
How do you know if you are withholding too much or too little in tax withholding?
Step 1: At any given time in the year, take all your pay-stubs (including your spouse) and add up all the federal tax withholding year to date.
Step 2: Add up all other federal tax withholdings YTD and IRS estimate payments you made YTD.
Step 3: Based on Step 1 and Step 2 estimates, and add up the remaining IRS tax withholdings for the remainder of the given year.
Step 4: Add up Step1 + Step 2 + Step 3 = Total estimated IRS tax payments for the year.
Step 5: Use either the Income Tax Rate Calculator or the Tax Year Calculator and enter the annual tax withholding amount and as a result you will find out if you can expect a tax refund or if you might owe taxes.
What if your paycheck tax withholding amount is at zero or 0, could you still expect a tax refund?
Depending on your income, filing status, and number of qualified dependents, your paycheck tax withholding could be zero each paycheck. At the same time, you could qualify for a substantial IRS tax return refund. In most cases, this is due to the Child Tax Credit or Earned Income Tax Credit. Read this chart to see cases with zero paycheck tax withholding that resulted in tax refunds: tax returns with zero paycheck-based IRS Tax Withholding with refunds.
Where to submit a W-4 to?
A W-4 is submitted only to your employer, not the IRS or state tax agency.
Keep a copy of your latest W-4 Form per paycheck or employer for your own records. Find your state tax withholding form(s).
Where are the state related tax withholding or W-4 forms?
Estimate your state income taxes with a state income tax estimator
Select your state tax withholding form(s)
Taxercise your paycheck with an eFile.com W-4 related calculator or estimator!
W-4 Creator: If for any reason you do not need the pay period tax withholding dollar amount, and you only need to fill out or complete a W-4 then use the W-4 Creator tool. The tool will guide through each step and at the end you can sign, download and/or email the W-4 to your employer and/or yourself.
Paycheck based W-4 tool: If you would like to estimate the actual dollar amount based on your W-4 entries, use the W-4 Paycheck Calculator tool or PAYucator.
Tax Return Calculator: If you have various sources of income e.g. W-2s, 1099s, Dividends, etc. and you would like to know the required withholding amount, then use the Tax Return estimator first, before you complete the W-4 based on the 2023 Tax Return Calculator results. Once you have the tax returns results, contact a Taxpert® for a free consultation on how to complete your form W-4. Income Tax Rate Calculator: For a high level estimate on what your total IRS income taxes might be based on your combined annual income use this Income Rate Calculator and use these results to complete your W-4.
State Income Rate Calculator(s): Based on your combined annual state income select a State Income Rate Calculator. Then complete your state tax withholding form(s) based on the calculator results.
Talk to a Taxpert ®
for a free W-4 consultation.
Tax Refund Myth and Fact!
Myth: Tax refund money is free government money or the result of "refund boosting" by tax preparation software.
Fact: In most cases a tax return refund is a taxpayer's money as the result of too much tax withholding or insufficient tax planning by taxpayers. There are cases when Refundable tax credits do "boost" or enhance a tax refund in addition to too much in IRS tax withholding.
Don't Penalize yourself with a Tax Refund!
Don't do what too many hard working taxpayers do, they withhold too much in taxes per paycheck. This self imposed penalty could cost you up to 18% of your income a year. Yes, it's self imposed as the result of insufficient taxpayer planning: Learn more about self imposed penalties.

Click the link on your left and follow these steps through the year. Or use these simple tax calculators to estimate your income tax return with up-to-date information. These figures will be reported when you file your tax return on eFile.com. The eFile Tax App will report your situation on your return based on your answers to straightforward tax questions.

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