When you start a new job, part of the onboarding process is completing a fun piece of paperwork called a W-4 Form. It’s your first week of work and you’re likely nervous and excited, so answering such questions as “total number of allowances you’re claiming” may not be at the top of your list of priorities. If you’re like many, you may claim the number of dependents you actually have, not realizing that you can claim up to 10 allowances even if you have zero children. This ensures less is taken out of each paycheck. Once you’ve filed your taxes and found you don’t like the results, though, you may naturally want to change your withholdings to avoid the same issue next year. You might also want to change your withholdings if your financial circumstances change halfway through the year. Doing this just requires a simple visit to human resources.
Changing W2 Withholdings
The W-2 form is the document you receive from your employer in January. You use this form to file your taxes. But the information your employer uses comes from your W-4 form, which you generally complete when you’re first hired. You can re-submit this form at any time to the person who handles such things. If you never ask to update it, your withholdings will remain the way you requested them when you were hired.
Exceptions for Multiple Earners
If you work more than one job or you share a household with someone else, you’ll want to calculate your tax allowances using the two-earners/multiple jobs worksheet, which is included in the Form W-4 worksheet. This will help you figure the allowances your household needs to take for each job.
New Tax Tables for 2018
Due to the tax law changes, the IRS has released new tax tables for employers to use when calculating withholdings. This adjustment takes into account the new standard deduction, which has nearly doubled, and the new tax tables. Since things are changing so dramatically, these withholding tables are designed to ensure most taxpayers will see minimal change in their refunds or amounts owed at tax time. Otherwise, every employee would have to redo their W-4 forms, calculating just how much they would need to take out based on their dependents and marital situation. However, for workers who are concerned about how the changes might affect their refund, the IRS’s withholding calculator has been updated to reflect the tax changes.
Filing Your 2017 Taxes
If you’re still working on your 2017 taxes, your withholdings should be on Form W-2 provided by your employer. You’ll simply enter your income information while completing Form 1040 and pay close attention to your refund. If you find that you would prefer to get more of a refund next year, or perhaps you’d rather have less money taken out to get less of a refund, adjust your withholdings on your W-4 form to increase your federal tax allowances. However, you may want to use the calculator to make sure the change will work with the new tax brackets.
