A form W4 is officially known as the Employee’s Withholding Allowance Certificate, the form W-4 is a form that the federal government requires employees to fill out when they are just hired. Information which are just submitted on the form, let employees know how much salary to hide from their paycheck stub for their tax purposes.
All the newly hired employees need to fill out a Form W4 since it informs your employers about how much federal taxes will be withdrawn from your paycheck and sent to the government.
The Form W 4 is important because if not enough money is withdrawn from your income, you will have to pay a larger amount of tax bill during the tax season and you might also have to face a penalty.
As an employer, you should keep an eye on employee’s most recent w 4 forms in his or her payroll file. You also need to make sure to add the correct number of allowances into your payroll processing system.
If an employee fails to sign a form w 4 before his payroll arrives, you can withheld federal income taxes as if the employee has chosen single with zero allowances. The company could also use the employee’s W-4 forms from the previous year to calculate the withholding taxes.
Whenever you get a new job or you get to experience a huge financial shift in your life, you need to fill out a form W4.
Employees will provide their employers with a complete & signed w 4 forms within 10 days of change in their financial status that affects their withholdings.
Henceforth, the IRS in Notice 2018-92 gave the employees a temporary postponement from this 10-day rule when their withholding has changed solely as a result of the tax act.