Disclaimer: I am not a tax professional. This information is for educational purposes only and should not be seen as legal tax advice. Please ask a tax profession about questions related to your specific tax situation.
Quick References:
When you start a new job at a company, you will fill out a W-4 tax form. This form tells your employer what your tax filing status is (ex. married, single, head of household) and how much taxes to withhold (take) from each paycheck and send to the IRS on your behalf.
5 Reasons to Update Your W-4 Form
There are also situations when you should update your W-4 form with your employer.
You should do this whenever you have a major change in your family's tax situation, such as:
You get a second job
You lose your job
Your spouse gets a new job or stops working
You get married or divorced
You have a baby or adopt a child
💰Is receiving a large tax refund a good thing?
Actually, no. Receiving a large tax refund means that you are lending the government your money tax-free. 💸
What you really want to aim for is a $0 tax bill — $0 owed to the government and $0 refund.
Filling out your W-4 tax form (and your spouse’s W-4) correctly will help you get closer to this goal.
There are 5 steps in the 2024 W-4 form. Let’s look at each step.
Step 1: Enter Personal Information
(a) Name
Many English names have three parts: first name, middle name, and last name.
For example: John William Doe
The first space in the W-4 form asks for a first name and a middle initial. A middle initial is the first letter of the middle name, followed by a period. So for this person, the name section would be filled out as:
First name and middle initial → John W.
Last name → Doe
For many Spanish speakers, they have two first names and two last names, with no middle name. (Look at your official government-issued documents like a passport, driver’s license or birth certificate if you are unsure how to fill out the name section.)
For example: Benjamin Miguel Rosales Rodriguez
First name and middle initial → Benjamin Miguel
Last name → Rosales Rodriguez
Address
Another use of the W-4 form is for employers to collect your mailing address which is printed on your paychecks and used on your W-2 tax form that is sent to you in January.
If you live in the Jackson Hole or another rural area, you likely receive your mail at a post office box. For this reason, you should use your PO Box address. (PO is an abbreviation for post office.)
For example: PO Box 1234
Some computer systems don't allow PO Box addresses. If your employer doesn't accept PO box addresses, refer to the last section in the blog post Physical Address vs. Mailing Address: How to write them & when to use them for alternative ways to write your address.
City or Town, State, and Zip Code
When writing the state on a form, we use two-letter abbreviations.
For Wyoming, the state abbreviation is WY.
For Idaho, the state abbreviation is ID.
Some towns have multiple zip codes, so be sure the address and zip code are correct. In Jackson, Wyoming, your zip code depends on which post office your box is located at.
For the "old" post office near Town Square, the zip code is 83001.
For the "new" post office near Target, the zip code is 83002.
Here are some examples in the Jackson Hole area:
PO Box 123 PO Box 3456
Jackson WY 83001 Jackson WY 83002
PO Box 567 PO Box 234
Alpine WY 83128 Victor ID 83455
(b) Social Security Number
A social security number has three sets of numbers (3 digits, 2 digits, 4 digits) separated by dashes. Make sure you use the dashes when writing your social security number.
Here is an example:
Social Security Number → 123-45-6789
(c) Filing Status
There are three tax filing options:
Single or married filing separately
Married filing jointly or qualifying surviving spouse
Head of household
If you are single with no dependents or married, it’s easy to select a box. Determining if you are a head of household is a little more complicated.
Filing jointly means that you and your spouse do your taxes together and file one tax return to the IRS.
Filing separately means that you and your spouse each do your own taxes.
Head of household is for individuals who are not married and pay more than half the costs of keeping up a home for a qualifying dependent. It is best to use the Interactive Tax Assistant tool to determine if you qualify for this filing status: What is my filing status?
Step 2: Multiple Jobs or Spouse Works
Steps 2-4 are optional. Only fill them out if they are relevant to you.
Complete Step 2 if:
you have more than one job at the same time, or
you are married, filing jointly, and both you and your spouse work
If one of the scenarios applies to you, do ONE of the following:
Use the IRS Tax Withholding Estimator to get the most accurate withholding.
Go to page 3 of the W-4 form to use the Multiple Jobs Worksheet and enter the results in Step 4(c)
If you (the taxpayer) have only two jobs OR you and your spouse (married filing jointly) have two jobs in total where the two incomes are similar, check the box in 2(c)
Here’s an example for part 2(b):
Juan and Carla are married, filing jointly. They each work one job. Juan is a carpenter and earns $85,000. Carla is a housekeeper and earns $35,000. On the Multiple Jobs Worksheet, look for the higher paying job (Juan - $85,000) on the left and the lower paying job (Carla - $35,000) at the top. Where the two lines meet is the additional tax withholding. This number should be entered in Step 4(c) for only the highest paying job . In this example, Juan would enter $4,890 into Step 4(c) on his W-4. Carla would leave her Step 4(c) blank or $0.
Step 3: Claim Dependents
If you and your spouse work, only one of you should complete Step 3, generally the one who has a higher gross income.
This step is the most confusing. Many individuals claim children and dependents (such as family in another country) who actually don’t qualify under IRS definitions.
Just because you have a child and financially support them or send money to your family in another country to financially support them, does not automatically qualify them as your "child" or "dependent" on your taxes. The IRS has many requirements for child and other dependents tax credits.
According to LatinoTaxPro.com, "Beginning in 2018, the child must also have a Social Security Number. This Means That…. Your dependents in Mexico will NOT be able to claim this credit. They need to live in your household in the United States and have a valid Social Security Number."
To get the most accurate advice, use the Interactive Tax Assistant tool under Does my child/dependent qualify for the child tax credit or the credit for other dependents?
Here is how to complete this section. Let's look at the math for an example:
Let's say you have 2 qualifying children under the age of 17 (16 years old and younger on December 31 of the tax year).
Line 1: 2 X $2,000 = $4,000
Let's say you have 1 qualifying dependent.
Line 2: 1 x $500 = $500
The total in Line 3 of Step 3 would be $4,500.
Step 4: Other Adjustments
Line 4(a)
Enter other income you receive that is not from a job (such as interest, dividends and retirement income) in line 4(a) or leave it blank.
Line 4(b)
You can use the worksheet on page 3 to itemize your deductions, but most people take the standard deduction and leave this blank.
Line 4(c)
If your spouse also works or you have a second job, 4(c) is where you write the extra amount you want taken out of each paycheck.
Step 5: Sign the form
Sign and date the form in the Sign Here section. Your employer will fill out the last section.
Free Tax Assistance with VITA
If you have limited English skills, you likely qualify for free tax assistance from Volunteer Income Tax Assistance (VITA). IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. Get more information here: VITA (English) VITA (Spanish)
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