How to fill out the W-4 - YouTube

today we're going to talk about the W-4 for the 2018 version just came out first

I'm going to go through the paper version and then we're going to go

through the online version so whichever one you want to do just follow along

today's gonna cover a single no dependents possibly a new job or just

want to update your w-4 this is the video for you my name is Travis sickle

certified financial planner with sickle on her financial advisors first we're

gonna go through the paper version I'm gonna jump right in and as soon as we're

done we're gonna go right into the online version it doesn't matter which

version you do you should get identical answers so here we go this is the w-4

20:18 version and I'm gonna leave a link down at the bottom so you can get it

yourself although the link is right here it's an

IRS gov /a Form w-4 the purpose of the w-4 is to complete form w-4 so that your

employer can withhold the correct federal income tax from your pay it's

right here purpose complete w-4 so that your employer can withhold the correct

federal income tax from your pay the top section of the form w-4 for 2018 all the

directions are right here at the top I'm gonna point out a couple of things right

now if we look right here note that if you have too much tax without you

receive a refund when you file your tax return if you have too little tax

withheld you will attacks when you file your tax return and you might owe a

penalty so I'm gonna go ahead and highlight that because that is important

to understand

so what does that mean that means that the w-4 is only estimating how much

taxes you're gonna have to pay on the amount of income that you're earning but

rather than paying at all at the end of the year you're paying it throughout the

year so what this is saying is if you are estimating your withholdings to be

too high you're gonna get back this large refund or a refund that's all your

money anyways so you want to make it as accurate as possible so you're not

paying too much in advance think of it like giving the government a tax-free

loan and if you estimate in the wrong direction and you have to pay too much

you're gonna get hit with a penalty so it's important to estimate correctly

this is the bottom of the first page of the w-4 we're gonna come back to it it's

gonna have all your basic information and we're just gonna go ahead and jump

right to the next page this is going to be the bottom of the w-4 the things that

you're gonna fill out here is gonna be your name your last name your social

security number we're gonna come back and fill out the rest of this I just

wanted to show you in page order what we're looking at let's jump to the next

page more directions we're gonna go ahead and skip over those because I'm

gonna go through this with you so we're going to start right up here right at

line a so that's gonna enter one for yourself so you're gonna put a 1 right

next to a on line B enter one if you will file as married filing jointly we

know this is not true for this video so we're gonna go ahead and put a zero to

your single four line C enter one if you'll file as head of household head of

household is only if you have other dependents living in your household

you're not married but you are taking care of them so in this instance you're

single we're gonna put a zero line D enter one if you are single you are or

married filing separately or have only one job we know we only have one job and

you are single so we are gonna put a one because it says or not and since you're

single and it says or right here we can just go ahead and put a one and move on

letter e child tax credit we're gonna go ahead and put a zero because you are a

single letter F for other dependents we don't have any

in this instance so we're gonna put a zero letter G other credits if you have

other credit see worksheet 1-6 a publication 505 that enter the amount of

that worksheet here first we're gonna go ahead and put a zero because we don't

have any other credits and the other credits worksheet on the publication 505

does not exist yet maybe in a couple weeks but not as of the recording of

this video I actually called the IRS to find out when they were gonna have the

2018 version issued but it's not out yet the 2017 version has 2017

tax rates tax brackets so you do not want to use that so again that's

worksheet 1-6 of publication 505 other credits doesn't exist we're gonna put a

zero move on letter H and lines a through G and enter the total here so we

have to put 2 right there for accuracy or completeness of that worksheet we're

gonna have to look at these two if you plan to itemize which were not the age

of other deductions and here if you have more than one job which you should not

in this video in this example and if you're married filing jointly which

we're not so we're gonna stop right here says it right there stop right there

let's go back to page 1 for the bottom of page 1 and we're gonna go ahead and

enter the two for line 5 total number of allowances you're claiming so that's

going to be your two right there so again let's go ahead and put your name

your last name your social security we're gonna check off single you're

gonna put your home address your city state and zip then you're going to sign

it and then you're going to turn it in to your employer so moving to the app

side of the IRS Form w-4 2018 version if you go to WWE are s gov /w for a PP w-4

app I'll put the link down at the bottom we're gonna scroll right down and you're

gonna see withholdings calculator click on it and we're going to go ahead and

fill it out you're single so checkoff single can someone else claiming as a

dependent on his or her tax return no let's continue first section okay it

already fill out a one for you here so is there any dependent to your claim

your tax return let's put a zero there if any of these over here apply to you

go ahead and check them off over here check if you'll be 65 or older in

January 1st 2019 or you are blind so we already know that we're not going to put

anything here because this is child and dependent Care Credit

we're not gonna have either so we're gonna go ahead and scroll down just

leave it as zeros child tax credit same thing Earned Income Tax Credit same

thing zero other credit so we don't have any we're going to continue so right

here you're gonna enter the gross wages salaries and tips everything that's your

earned so I'm gonna go ahead and just put fifty thousand for this example and

I'm gonna show you two examples as we go through this enter any bonuses you have

we're just gonna keep it simple put zero if you get bonuses if you have them put

it in there if you don't know what your bonuses are going to be you can either

estimate or put zero there's a good chance that your payroll provider will

put an estimate when you have bonuses typically any bonuses if they're out of

the normal cycle of the payroll typically about 25 percent again that's

going to depend on your payroll provider but for this example put zero so right

here you want to enter the total federal income withheld in 2018 if you're not

really sure what this is I'm going to show you the example so you can kind of

get an idea your last pay stub and it'll show you the year-to-date withholdings

the IRS is being redundant as usual they're saying enter the federal income

tax withheld from your last salary payment and they're just kind of getting

an idea of is it very different from paycheck to paycheck but again you're

giving them the estimate on your overall income and they're trying to get an idea

of what's helping withheld here today select how frequently you are paid

weekly that would be fifty two paychecks a year every two weeks if you're

uncertain if it's every two weeks or twice a month if it's always the same

date then that's going to be twice a month and if it's every other week like

every other Friday that's every two weeks the difference every two weeks is

going to be 26 payments a year twice a month is going to be 24 it's gonna

change you withholding slightly on what the estimate should be but they should

be almost identical whichever one you choose and then you're going to

monthly which is 12 payments a year this line saying select a date closest to

when you first held the job in 2018 if you were employed before 2018 then put

January 1st otherwise put the closest date select the closest date when this

job will end hopefully if you have long term employment you'll put December 31st

but it is a part-time or a seasonal then you put the estimate right there how

this last bit will really affect it if you're gonna make $50,000 but your job

is going to end in six months you're gonna actually withhold more per

paycheck than you would someone who's earning fifty thousand say over the

course of 12 months there's any non wage income we're just going to go ahead and

skip this if you only have one job no dependents here if you're making any

adjustments for a deductible IRA the adjustment section so here they're

looking for contributions to what's called a deductible IRA or a traditional

IRA if you have a Roth IRA that's not what they're talking about here they're

only looking for the traditional IRA contributions which are deductable for

example if you put 5,000 right here in this last line item 5,000 right here

it's gonna go back up to here and say you only made $45,000 because it's going

to reduce your overall taxable income but for this example we're gonna keep it

as 0 then we're gonna click continue if you want to go ahead and fill out your

itemized deductions it's going to give you the definition if you click on each

one of these on what to enter if you don't think you have any deductions or

unsure if you have any deductions go ahead and click in each one of these

areas and it'll tell you exactly what to put in otherwise just click continue and

move to the next section okay so this is going to be the printout that you're

going to have and as you can see right here we're single we have one job

this is your results page in 2018 it's estimating that you're gonna have to owe

four thousand three hundred and seventy three dollars but don't worry you're not

gonna have to pay that at the end of the year because if you filled this out then

it would estimate it for you here you can see that there's zero

allowances so if you see right here it says zero allowances and if you remember

on our w-4 on the paper copy it had two allowances the reason that is is because

we didn't put any amount of previous withholdings we assume that it was zero

yet we were still paid those dollars a year today so since right now we're

still in the first quarter roughly one fourth of four thousand three hundred

seventy three let's call it one thousand dollars and let's go back and see what

it does if we put the correct amount of withholdings previously

you

so if we come back to this section and we go ahead and put our current

withholdings at $1,000 and say that we're gonna have $100 this paycheck

being withheld and we continue you'll notice it goes back to two allowances so

the reason that it went to two allowances and didn't stay at the zero

is because it assumed with the two allowances that we've already paid our

taxes because that's what we told them so you can see from that small

adjustment to make it more accurate it gives us the right amount of allowances

now the other form didn't have us go through how much we've already paid as

far as our tax withholdings so we would have actually underreported if for

whatever reason we didn't withhold any taxes year-to-date

as you can see from the paper copy it didn't ask us if we had already paid any

taxes year-to-date to make that adjustment and that's why the IRS is

saying that the online versions supposedly a little bit more accurate

because it's going through a couple of additional questions to help arrive at

the correct amount of allowances so again if you had not withheld

year-to-date filled the paper copy out the way that we went through your

allowances would have been a little high you would have been - instead of zero as

you can see the higher the number the less that gets withheld from each

paycheck so by putting a zero you're going to withhold more per paycheck and

that's how it's getting to that four thousand dollar number at the end of the

year based on your income and based on the other allowances and deductions that

you're telling the IRS that you have at the end of the year that's when you

figure out whether or not you have to pay additional taxes or if you're gonna

get a refund but remember there's a good chance if your refund is large that your

allowances were not correct they were probably too low when they should have

been a little bit higher so make it as accurate as possible and

answer the questions to the best of your ability so there's a little difference

between the paper version and the online version but you should be getting the

same outcome at the end of the day so if you feel more comfortable with the

online version by all means go ahead and do it and if you've enjoyed this video

be sure to subscribe and leave your comments down at the bottom