The Peck Group LC
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Comprehensive Tax Law Representation Since 1995
We handle every aspect of tax law: preparing tax returns, representing clients during audits, resolving IRS and state tax controversies, and creating tax planning strategies for the future.

Making sense of the tax paperwork when starting a new job

On Behalf of | Aug 29, 2018 | Business Employment Tax |

Your first day at a new job is often a flurry of activity. You’re going through orientation, you’re taking diligent notes and you’re trying to remember every new thing you learn.

Then your employer hands you a W-4 form to complete. Your eyes start to glaze over. Making sense of taxes has never been your strong suit. How do allowances work again?

Completing the W-4

How you fill out the W-4 form determines how much money your employer will take out of your paycheck. This is calculated using “allowances.” The more allowances you claim on your W-4, the less money the IRS takes from your paycheck—and the more you take home.

How many allowances should I claim?

The W-4 instructions will walk you through the rules for claiming allowances. Most of the rules are pretty straightforward. For instance, you claim one allowance for every dependent. If you’re married filing jointly, you would claim one allowance for yourself and one for your spouse.

However, let’s say you’re single and have only one job. In this case, you could claim one or two allowances. By claiming one allowance, your paycheck will be smaller throughout the year, but you’ll be more likely to get a refund come Tax Day. If you claim two allowances, you’ll get more money each pay day, but you’ll be more likely to break even—or even owe taxes—when you file your tax return.

Whatever you do, it’s important not to claim more allowances than you’re legally permitted to claim. The IRS can charge you penalties for this mistake.

Do I have to fill out the W-4?

Opting to not fill out the W-4 at all won’t usually serve your best interest. For employees who fail to fill it out, the IRS will default to treating you as a single person with no other allowances—and withhold your taxes at the highest possible rate.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.