Federal Tax Withholding: Understand Your W-4 Tax Form

Your federal tax withholding can be difficult to understand. When you start a new job, your employer will need you to fill out a lot of paperwork. One of those forms is a W-4 tax form. This is a form required by the government to determine how much of your earnings will be held for federal taxes every pay period. The information that you put on there is very important and should not be taken lightly. Let's look at a few things you need to know about federal tax withholding.


When you start to fill out your W-4, you will immediately notice a worksheet that helps you determine how many exemptions to claim. This part of the process is pretty easy. Just fill out the answer to each line and add it up. The more exemptions that you claim, the less money is taken out of your paycheck.


If you are single and have no children, put down one exemption. The only exception to this rule is if you still live with your parents and they claim you on their taxes. If you are married and you are the only one with a job, you can claim two deductions.

If your spouse has a job that pays less than $1500, you can still claim the second deduction. You can also enter another exemption for each of your children. You can enter one more if you file your taxes as head of household. Another exemption is possible if you spend more than $1800 per year on childcare. If you have children you can even take additional exemptions for your child tax credit.

Finishing Up

Once you have figured out how many exemptions you have, add them all up and put them on line five. The next line asks you if there is an additional amount that you would like taken out of your check for different purposes. Decide whether you would like to contribute or save and you should be done with your W-4.

A careful step by step review of the form and the way you completed it should be the final step. Check your work and sign and date the form.

What should a student put on a W4?

When it is time to complete the appropriate paperwork for a new job, filling out a student W4 form can be confusing. Depending on your situation, there are a few things that you could do. Many college students are still claimed by their parents. If this is the case for you, you should put zero exemptions on your W4. Your parents can still claim you until you are 24 years old. If your parents do not claim you and you do not have any dependents, you should put "1" as the number of exemptions. If you have children or a spouse, your exemptions will be based on the number of dependents and yourself. 

Do both parents claim kids on a tax withholding form?

Both parents can claim a partial deduction for a dependent on their tax withholding forms if certain criteria are met. In general, the deductions can be shared only if the parents are filing jointly and are not sharing a household. The specific criteria include:

  • the parents are divorced or separated or have lived apart for at least 6 months this year,
  • the parents provided for over half of the child's financial needs,
  • the child is in custody of both parents during the year and
  • the "custodial parent" waives his or her right to claim the dependent fully.

If these conditions are not present, only one parent may claim the deduction as "head of household" for that particular dependent.

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