Page 36 - Tax Withholding Estimator FAQ's

HOW ARE M Y W -4 W ITHHOLDING RECOM M ENDATIONS

FOR LINE 3 OR LINE 4(C) COM PUTED?

The recommendations are based on the following steps:

1. Determine the amount of tax you want withheld this year, which is

the sum of your anticipated tax obligation and the amount of refund

you prefer (if any).
2. Subtract the amount of tax you have already had withheld this year

(including an estimate of how much more will be withheld before
you?re able to submit a new Form W-4).

3. Subtract the amount you would have withheld from now to the end

of the year if you had the baseline amount of tax withheld during that
time (this is the amount that your employer would withhold, given

your filing status and wage amount, if you left W-4 lines 2 through 4

blank).
4. If the result is positive, you need more than the baseline amount

withheld for the balance of the year, so the Estimator converts the
result to an amount per pay period and recommends that you enter

that on line 4(c).

If the result is negative, you need less than the baseline amount

withheld for the balance of the year, so the Estimator recommends

that you enter the annualized version of that on line 3.

TRAINBYUS: TRANSFORMING DIGITAL LEARNING