- 1). Complete IRS Form W-4. Enter your name and address in Box 1. Enter your social security number in Box 2.
- 2). Check the appropriate box for Box 3. If you are married and want to decrease the amount of federal income tax withheld from your paycheck, do not check the option for "Married but withhold at higher single rates." Check Box 4 if applicable.
- 3). Complete the applicable allowances schedule and enter the appropriate number on line 5. An important rule of thumb to remember is that the greater the number of allowances entered on line 5, the less federal income tax will be withheld from your paycheck. So if you want to decrease the amount of federal income tax withheld, you will enter a number greater than zero or one on line 5.
- 4). Enter zero on line 6. If you are trying to decrease the amount of federal income tax withheld, you do not want to enter an amount on line 6.
- 5). Verify if you are able to claim an exemption from federal income tax withholdings. An exemption applies only for the upcoming tax year. You may claim an exemption if you meet both of the following conditions: (i) you had a right to a complete refund of federal income tax withheld in the prior year because you had no tax liability and (ii) you expect to receive a full refund for the current tax year because you will have no tax liability.
- 6). Sign and date the W-4 and provide to your employer for processing.
- 7). Find the correct state income tax withholding form from the link provided in the Resources section below. Complete the form accordingly. Remember the rule of thumb: the greater the number of exemptions, the less income tax withheld. So if you want to increase your state income tax withholdings, enter exemptions less than the number you previously had. For example, if you are married with one child, you likely have exemptions of 3. To have more state taxes withheld, decrease the exemptions to 2, 1 or zero. If an option is provided for an additional amount to be withheld from each paycheck and you want to increase your state income tax withholdings, be certain to enter an additional amount. Sign and date the form and provide to your employer for processing.
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