Page 5 - Tax withholding and Estimated Taxes

12:15 - 17-Jun-2020
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Fileid: … tions/P505/2020/A/XML/Cycle03/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
wages, Railroad Retirement Tax Act compen- W-4P W-4P Withholding Certificate for Pension Determining Amount of Tax
sation, and self-employment income over or Annuity Payments Withheld Using Form W-4
$200,000 if you are filing as single, head of
W-4S Request for Federal Income Tax
household, or qualifying widow(er); over W-4S Withholding From Sick Pay The amount of income tax your employer with-
$250,000 if you are married filing jointly; and holds from your regular pay depends on three
over $125,000 if you are married filing sepa- W-4V W-4V Voluntary Withholding Request things.
rately. You may need to include this amount
when figuring your estimated tax. You may also See How To Get Tax Help at the end of this • The amount you earn in each payroll pe-
riod.
request that your employer deduct and withhold publication for information about getting these
an additional amount of income tax withholding publications and forms. • Your payroll period.
• The information you give your employer on
from your wages on Form W-4. Form W-4.
Net Investment Income Tax (NIIT). You may Salaries and Wages
Form W-4 includes four steps that will give
be subject to NIIT. NIIT is a 3.8% tax on the information to your employer to figure your with-
lesser of net investment income or the excess Income tax is withheld from the pay of most em- holding. Complete Steps 2 through 4 only if they
of your MAGI over $200,000 ($250,000 if mar- ployees. Your pay includes your regular pay, apply to you.
ried filing jointly or qualifying widow(er); bonuses, commissions, and vacation allowan-
$125,000 if married filing separately). NIIT may ces. It also includes reimbursements and other Step 1. Enter your personal information, in-
need to be included when figuring estimated expense allowances paid under a nonaccounta- cluding your anticipated filing status. Your an-
tax. You may also request that your employer ble plan. See Supplemental Wages, later, for ticipated filing status will determine the stand-
deduct and withhold an additional amount of in- definitions of accountable and nonaccountable ard deduction and tax rates used to figure your
come tax withholding from your wages on Form plans. withholding.
W-4.
If your income is low enough that you won’t
Photographs of missing children. The IRS is have to pay income tax for the year, you may be Step 2. Complete this step if you (1) hold more
a proud partner with the National Center for exempt from withholding. This is explained un- than one job at a time, or (2) are married and
Missing & Exploited Children® (NCMEC). Pho- der Exemption From Withholding, later. plan to file a joint return and your spouse also
tographs of missing children selected by the works.
Center may appear in this publication on pages You can ask your employer to withhold in- If you or your spouse have another job,
that would otherwise be blank. You can help come tax from noncash wages and other wages complete Steps 3 through 4(b) on only
bring these children home by looking at the not subject to withholding. If your employer ! one Form W-4. Your withholding will be
CAUTION
photographs and calling 800-THE-LOST does not agree to withhold tax, or if not enough most accurate if you do this on the Form W-4
(800-843-5678) if you recognize a child. is withheld, you may have to pay estimated tax, for the highest-paying job.
as discussed in chapter 2.
Military retirees. Military retirement pay is Step 3. Complete this step if you have depend-
treated in the same manner as regular pay for ents and think you may be eligible to claim the
income tax withholding purposes, even though child tax credit or credit for other dependents on
your tax return. Also, complete this step if you
1. it is treated as a pension or annuity for other tax want to include an estimate of your other tax
purposes.
credits (for example, an education credit or the
Household workers. If you are a household foreign tax credit).
Tax Withholding worker, you can ask your employer to withhold Step 4. Complete this optional step to make
income tax from your pay. A household worker
is an employee who performs household work other adjustments.
for 2020 in a private home, local college club, or local • Other income (not from jobs).
• Deductions (other than the standard de-
fraternity or sorority chapter.
Tax is withheld only if you want it withheld duction).
and your employer agrees to withhold it. If you • Any additional amounts you want to with-
Introduction don’t have enough income tax withheld, you hold from each check.
may have to pay estimated tax, as discussed in
This chapter discusses income tax withholding chapter 2. New Job
on:
• Salaries and wages, Farmworkers. Generally, income tax is with- When you start a new job, you must fill out a
• Tips, held from your cash wages for work on a farm Form W-4 and give it to your employer. Your
• Taxable fringe benefits, unless your employer both: employer should have copies of the form. If you
• Sick pay, • Pays you cash wages of less than $150 need to change the information later, you must
• Pensions and annuities, during the year, and fill out a new form.
• Gambling winnings, • Has expenditures for agricultural labor to-
• Unemployment compensation, and taling less than $2,500 during the year. If you work only part of the year (for exam-
• Certain federal payments. ple, you start working after the beginning of the
This chapter explains in detail the rules for with- Differential wage payments. When employ- year), too much tax may be withheld. You may
be able to avoid overwithholding if your em-
ees are on leave from employment for military
holding tax from each of these types of income. duty, some employers make up the difference ployer agrees to use the part-year method. See
The discussion of salaries and wages includes between the military pay and civilian pay. Pay- Part-Year Method, later, for more information.
an explanation of how to complete Form W-4. ments to an employee who is on active duty for
This chapter also covers backup withholding a period of more than 30 days will be subject to Employee also receiving pension income. If
on interest, dividends, and other payments. income tax withholding, but not subject to social you receive pension or annuity income and be-
security or Medicare taxes. The wages and gin a new job, you will need to file Form W-4
Useful Items withholding will be reported on Form W-2, with your new employer. However, you can
You may want to see: Wage and Tax Statement. choose to split your withholding between your
pension and job in any manner.
Form (and Instructions)
W-4 W-4 Employee's Withholding Certificate

Chapter 1 Tax Withholding for 2020 Page 3