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W-4 Tax Withholdings

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Easily Update Your Tax Withholding

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W-4 Tax Withholding Updates

To update your Federal tax withholding amounts, we will need you to complete a new W-4 Form. You can do this online within the Employee Portal, or by sending us a new W-4 Tax Form.

You may update your W-4 as often as you like and at any time during the year.

Wondering what to claim on your W-4?

Visit the IRS W-4 Tax Estimator App

How do I update my W-4 Tax Withholding elections?

  • Select: Taxes>Tax Withholding and then click the green, “Update Forms” button to begin the update wizard!

IRS Q&A Regarding the new W-4 Form

The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees.

Allowances are no longer used for the redesigned Form W-4. This change is meant to increase transparency, simplicity, and accuracy of the form. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.

No. Employees who have furnished Form W-4 in any year before 2020 are not required to furnish a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently furnished Form W-4

Your withholding will be computed based on your filing status’s standard deduction and tax rates, with no other adjustments.

A. You should generally increase your withholding if:

  • you hold more than one job at a time or you and your spouse both have jobs (Step2) -or-
  • you have income from sources other than jobs or self-employment that is not subject to withholding (Step 4(a)).

If you do not make adjustments to your withholding for these situations, you will very likely owe additional tax when filing your tax return, and you may owe penalties. For income from sources other than jobs, you can pay estimated tax instead of having extra withholding.

You should generally decrease your withholding if:

  • you are eligible for income tax credits such as the child tax credit or credit for other dependents (Step 3), and/or
  • you are eligible for deductions other than the basic standard deduction, such as itemized deductions, the deduction for IRA contributions, or the deduction for student loan interest (Step 4(b)).

Tax rates increase as income rises, and only one standard deduction can be claimed on each tax return, regardless of the number of jobs. Therefore, if you have more than one job at a time or are married filing jointly and both you and your spouse work, more money should usually be withheld from the combined pay for all the jobs than would be withheld if each job was considered by itself.

Adjustments to your withholding must be made to avoid owing additional tax, and potentially penalties, when you file your tax return. All of this has been true for many years; it did not change with the recent tax law changes. The old Form W-4 accounted for multiple jobs using detailed instructions and worksheets that many employees may have overlooked. Step 2 of the redesigned Form W-4 lists three different options you should choose from to make the necessary withholding adjustments.

Note that, to be accurate, you should furnish a 2020 Form W-4 for all of these jobs.

If you have income from self-employment (including as an independent contractor), you will generally owe both income tax and self-employment tax. Form W-4 is primarily intended to be used by employees who are not subject to self-employment tax. Thus, like the old Form W-4, the redesigned Form W-4 does not compute self-employment tax.

If you would like to use Form W-4 to make an adjustment to your withholding to account for self-employment income that you will receive from another source, use the Tax Withholding Estimator at www.irs.gov/W4app or refer to IRS Publication 505

Please consult with your qualified Tax Consultant or Trusted Adviser for guidance. AdvanStaff HR does not offer tax advice.

Helpful Resources from IRS.GOV

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