What Are Withholdings?
Withholdings are a portion of your wages that is not included in your paycheck but instead is sent directly to the federal, state, or local tax authorities. Withholdings greatly reduce the amount of taxes you will have to pay at the end of the tax year when you file your tax return.
How Do I Start my Withholdings at my Current Job?
When you first start at a new position, you should fill out Form W-4. A W-4 allows your employer to start withholding wages from your paycheck. You can specify the number of allowances you want to claim for yourself and/or dependents, or you can specify a dollar amount you want withheld each pay period. The Form W-4 includes a worksheet to help you determine how many allowances you should claim. If you would like to change the amount that is being withheld from your paycheck from an existing employer, you can submit a new W-4 with your corrected information.
How Much Should I Withhold?
How much you should withhold ultimately depends on your personal situation. Determining factors include your marital status, the state you live in, and your annual income. To see how much you should be withholding every pay period, use this IRS withholdings estimator.
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