Welcoming a new hire to the office? After showing them the coffeemaker (priorities!), make sure they fill out a Form W-4.
The IRS Form W-4 — which should be filled out by all employees — determines how much federal tax should be withheld from an employee’s paycheck every pay period. Employers withhold taxes so that employees won’t be subject to huge bills from the IRS come tax time.
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The IRS calculates how much tax to withhold based on the withholding information each employee indicates on their Form W-4. The IRS also takes into account whether employees are filing jointly or on their own, among other factors.
If an employee doesn’t submit a Form W-4, the IRS requires you to withhold taxes from them at the highest rate (which likely won’t come as welcome news).
No. You can answer an employee’s questions, but can’t fill out the form or influence how they do so. If employees need help determining their withholding allowances, you can direct them to the IRS’s withholding calculator.
The IRS requires employees to fill out a new form upon starting a new job. However, as an employer, it’s helpful to remind employees to provide a new Form W-4 if their personal or financial situation has changed. This will ensure that an appropriate amount of taxes is being withheld from each paycheck.
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If your employee didn’t claim all the allowances they were entitled to, their employer cannot repay the tax previously withheld — but the employer should ensure that the employee fills out a revised W-4 to correct the amount moving forward. If, however, the employer mistakenly withheld too much tax from an employee’s paycheck, the IRS has rules regarding how employers should return these amounts.
You can find the latest version of the W-4 along with any relevant updates on the IRS website here.
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