Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

W-4 Form

What it is:

A W-4 form is a standard IRS form an employee uses to report federal taxability status to an employer.

How it works (Example):

An employer is required by law to withhold taxes from an employee's pay based on information reflected in the employee's W-4 form. The employee uses a W-4 to report his or her marital status, spousal employment status, any physical disabilities and the number of qualifying dependents (for example, children). If the employee is married, the W-4 form also asks whether the employee plans to file income taxes separately or jointly with his or her spouse.

Why it Matters:

Since an employer withholds taxes based on the information contained in a W-4, it is important that an employee resubmit an updated W-4 whenever he or she experiences significant changes in taxable status (for example, marriage, divorce or the birth of a child).

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