This post was written by Greta Nickerson of Xenium
While payroll departments across the country were busy preparing for year’s end in December, we are almost just as busy in January fielding questions about the form W-4. As employees begin thinking about filing their taxes, they want to be sure they are claiming the proper amount on the W-4 and they call the payroll department. Most payroll specialists are unable to give tax advice, but there are a few tips we can pass along to help employees complete the form…
First, there is an online withholding calculator through the IRS website. I’ve found it more useful than the worksheet on the back of the W-4 form. Employees will need a recent pay stub. The calculator asks for year to date information and then estimates the federal income tax withholding for the year, and recommends what you should have withheld. *Note – this calculator is only used for Federal income tax, and is not available for State income tax.
Second, make sure that your payroll and/or HR departments obtain the most current version of the W-4 form. This is usually released in late December and is effective for the calendar year.
Third, remind any employees that have claimed exempt on their W-4 that they need to complete a new W-4 for the New Year. Exempt status does not “carry over” into the next calendar year.
Finally, if an employee still has a lot of questions about their taxes, refer them to a licensed tax professional.
