Is it Time to File a New W-4?
A tax form W-4 is a form created by the Internal Revenue Service and used by your employer to determine the amount of taxes to withhold from your paycheck. Your employer will require that you complete this form upon hire, but there are times when it is appropriate to update the form. Some employers will communicate on a frequent basis to remind employees to update their tax form W-4, but are not required to do so. It is the employee’s responsibility.
Recommendation for Employer: If an employee files their tax return and owes a larger than normal amount, the employee often will point their finger at the employer and say you “did not withhold enough” even if the employer withheld what the employee requested on their tax form W-4. Yes, that is really silly, but it happens. For that reason alone, we recommend that employers request updated tax forms W-4 on an annual basis and incorporate this request with other required typical annual requests such as benefits, and employee handbook acknowledgements. Batch all of these requests into one request to reduce administration.
Recommendation for Employee: A tax form W-4 is generally updated when there is too much tax or not enough income tax is being withheld. This may be a result of a life event such as a marriage, buying a house or having a child. Other situations include getting a second job, a spouse getting a second job or when getting divorced.
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