Out of school and into the workforce. If the expression describes you or a family member this summer, filling out Form W-4 properly can make your first job less taxing.
Here’s why: The amount of federal income tax withheld from your wages depends on how you complete IRS Form W-4, the “Employee’s Withholding Allowance Certificate,” which tells your employer your marital status and the number of withholding allowances you’re claiming.
Withholding allowances are similar to the number of dependents you have. Claiming more allowances generally reduces the income tax deducted from your paycheck, but you can only claim the number you’re entitled to.
Think too much tax will be withheld? As long as you expect to work no more than 245 days for all employers during 2015, you might want to consider making a written request to have your federal withholding calculated using an alternative method. The “part-year employment method” of withholding can boost your net pay. Just be sure to complete a new Form W-4 next January.
Caution: Estimate your annual income carefully. Form W-4 affects only the amount of tax withheld, not the total tax that will be due with the tax return you’ll file at the end of the year.
You may also be entitled to tax breaks such as above-the-line deductions for moving expenses and student loan interest. Please call for information and advice.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter.