Decreasing W-4 allowances will decrease the net pay in your paycheck and increase your total tax burden.
W-4 is an Internal Revenue Service (IRS) tax form completed by an employee in the United States to indicate his or her tax situation. W-4 is the form that tells your employer how much of your salary NOT to tax. W-4 form is the IRS document completed for employer to determine how much should be withheld from your paycheck for federal income taxes and sent to the IRS. The importance of updating the W-4 regularly is the key to paying the correct taxes. Completing your W-4 accurately will help you avoid overpaying your taxes throughout the year or owing a large balance at tax time. If you get a large amount of money each year, you should pay attention to the amount we have, because that amount affects your refund.
Decreasing W-4 allowances will decrease the net pay in your paycheck and increase your total tax burden. If you claim more allowances then less money is held out from your paycheck. This results in a higher net paycheck. Form W-4 is one of first things you do when you start a job. Form W-4 your employer can withhold the correct federal income tax from your pay.
Grade: 9
Subject: business
Chapter: W-4 allowances
Keywords: W-4 allowances
