The term Form W-4 refers to a document used by employers to calculate the federal income tax withholding for their employees. Internal Revenue Service (IRS) Form W-4 gathers information on an employee's itemized deductions, tax credits, adjustments to income, and whether or not there are two-earnings in the household or an individual holds multiple jobs.
During the onboarding process, new employees are asked to complete IRS Form W-4. The information on this document is subsequently used by the company's payroll department to determine the correct amount of federal income tax withheld from the employee's paycheck. Employees should also consider completing a Form W-4 any time their personal or financial situation changes.
The types of information gathered on this form include: