2025 Federal W-4 Withholding Estimator

What is a W-4 Form?

The Form W-4, Employee's Withholding Certificate, is an IRS form that you complete for your employer. The purpose of the form is to tell your employer how much federal income tax to withhold from your paycheck. It's important to fill it out correctly to avoid having too much or too little tax withheld. If too little is withheld, you might owe a penalty when you file your taxes. If too much is withheld, you'll likely get a refund. You should submit a new W-4 form whenever your personal or financial situation changes.

Key Considerations When Completing Your W-4

• Filing Status: In Step 1, you'll choose a filing status (Single or Married filing separately, Married filing jointly, or Head of household). Your filing status determines your standard deduction and tax rates.
• Multiple Jobs or a Working Spouse: If you have more than one job or your spouse works, you'll need to complete Step 2. This step helps to ensure that enough tax is withheld from your combined income. You can use the IRS's online estimator, the Multiple Jobs Worksheet, or check a box if you have only two jobs. For those with three or more jobs in a tax year, we recommend that you add all of highest paying jobs' wages together before entering these into the box for the highest paying job. In the lowest paying job box, you will enter only the lowest paying job's wages. There are two IRS recognized methods for determining the additional income tax withholdings:
  1. The table method is used in this tool. It can currently accommodate multiple jobs where the highest paying job has wages of up to $500,000 and the lowest paying job has wages below $120,000.
  2. The detailed calculation method is available at the IRS Tax Withholding Estimator. You will need copies of your most recent paystubs and other documents in order to complete this. This approach is complex and tends to produce the most precise information for completing the W-4.
• Dependents and Other Credits: In Step 3, you can account for dependents to determine the amount of the child tax credit and the credit for other dependents that you may be able to claim. This will reduce the amount of tax withheld. You can also include other tax credits you're eligible for in this step.
• Other Adjustments (Optional): Step 4 allows you to make other adjustments to your withholding:
  • (a) Other income (not from jobs): You can enter other income you expect to receive that won't have withholding, like interest, dividends, or retirement income.
  • (b) Deductions: If you expect to claim deductions other than the standard deduction, you can use the Deductions Worksheet to reduce your withholding.
  • (c) Extra withholding: You can enter any additional amount you want withheld from each paycheck.
• IRS Tax Withholding Estimator: For the most accurate withholding, especially if you have a more complex tax situation, consider using the IRS's online Tax Withholding Estimator.
• Exemption from Withholding: You may be able to claim an exemption from withholding if you had no federal income tax liability in the previous year and expect none in the current year.
• Expected Adjusted Gross Income: If your adjusted gross income for the upcoming tax return is expected to be $150,000 or higher ($75,000 for those who are married filing separately), a penalty will be levied at the end of the tax year (when the return is filed) when the income taxes withheld and the sum of any quarterly estimated tax payments are less than 110% of the actual taxes owed. With this in mind, it is generally better to have too much income taxes withheld and avoid the penalty than to incur the penalty. You will get the excess withholdings back when your tax return is timely filed.

As a reminder, this is a tool to help you with completing your W-4 form that you will provide to your employer. This is not a substitute for qualified advice from a licensed lawyer or tax professional.