W-4 form

When a new employee joins your team, one of the first things they need to do is fill out a W-4 form—the Employee’s Withholding Certificate.

Homebase Team

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What is a W-4 form?

When a new employee joins your team, one of the first things they need to do is fill out a W-4 form—the Employee’s Withholding Certificate. This form tells you, the employer, how much federal income tax to withhold from their paycheck. It’s basically their way of making sure the IRS receives the correct amount of tax throughout the year.

Handling W-4 forms correctly is crucial for smooth payroll operations, and Homebase payroll makes it easy by automating tax withholdings and securely storing employee records.

Why the W-4 form matters

The W-4 is important because it directly impacts how much tax is withheld from an employee’s paycheck. If too little is withheld, the employee might owe money during tax season. If too much is withheld, the employee might get a big refund, which means they’ve been giving the IRS an interest-free loan all year.

For employers, getting W-4 details right is key to smooth payroll operations and avoiding IRS headaches.

When employees should fill out a W-4

Employees should complete or update their W-4 when:

Starting a new job – Every new hire must fill one out before their first paycheck.
Changing withholdings – If they need more or less tax taken out, they can update their W-4 anytime.
Experiencing a life event – Marriage, having kids, or picking up a second job can all affect their taxes.

What employers need to do with the W-4

Once an employee hands in their W-4, employers must:

Use the information to determine how much tax to withhold.
Update your payroll system to reflect any changes.
Keep the W-4 on file (you don’t send it to the IRS, but you do need to keep a copy for your records).
Apply the new withholding adjustments starting with the next payroll cycle.

How to fill out a W-4 form

The W-4 form might look intimidating, but it’s actually pretty straightforward. Here’s what employees need to fill out:

Personal information – Basic details like name, address, and Social Security number.
Multiple jobs or spouse works – Employees adjust their withholdings if they have more than one job or if their spouse also works.
Claiming dependents – If they have kids or other dependents, they can reduce their taxable income.
Additional adjustments – Employees can request extra withholding or report additional income.
Signature – The form isn’t valid until it’s signed.

Common W-4 mistakes and how to avoid them

Filling out a W-4 isn’t rocket science, but employees can still make mistakes. Here are some common errors and how to fix them:

Leaving sections blank – Incomplete forms can cause payroll delays.
Not updating after major life changes – Employees should revisit their W-4 if they get married, have kids, or change jobs.
Claiming too many dependents – This can lead to under-withholding and a surprise tax bill in April.
Forgetting to sign – An unsigned form is not valid.

Employers' guidance can go a long way in helping employees fill out their W-4s correctly.

How often employees should update their W-4

Employees don’t need to submit a new W-4 every year, but they should review it when:

They get married or divorced.
They have a child or take on new dependents.
They get a second job, or their spouse changes jobs.
They owed a large amount or received a big refund last tax season.

Encouraging employees to review their W-4 each year can help prevent tax surprises.

Make tax withholdings easier with HomebaseHow Homebase Makes Payroll and Tax Withholding Easier

Handling W-4 forms and tax withholdings manually can be time-consuming, but Homebase payroll simplifies the process by:

Automatically applying W-4 elections to payroll tax withholding.
Keeping W-4 forms organized and securely stored for compliance.
Ensure payroll taxes are calculated correctly so employees aren’t over- or under-withheld.
Providing a stress-free payroll experience so you can focus on running your business.

Sign up for Homebase today and make payroll and tax withholding easy for you and your team!

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