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welcome to tax teach my name is sean i'm a certified public accountant specializing in taxation today i want to teach you guys about form w-4 and the basics behind the form and how to fill out the form itself so form w-4 employees withholding certificate is a form that when you fill it out it determines how much taxes withheld on your paycheck so that's why it's so important for w-4 you fill it out then you give it to your employer then your employer puts that into their payroll system and then the payroll system calculates how much taxes are to be withheld on each of your paychecks so you want to fill out form w4 accurately and that's why today i want to go over how to fill out the form w-4 you should fill out a form to be for whenever you get a new job or when you have a life event life events like let's say you get married or you have kids because this situation these kind of situations affect how much taxes are you're gonna owe throughout the year so without further ado let's go check out formw4 and i'm gonna show you guys how to fill it out here's a 2021 form w-4 in all of its glory in this example i'm just going with a single taxpayer with one job and no dependent so very simple form w-4 um so step one you enter your personal information your name where you live and your social security number then you check single because we're doing a single taxpayer but if you're married you'd collect married filing jointly or head off household if you're ahead of household but for now we're going to go with single and then you go down to step two if you have multiple jobs or a spouse that works you wouldn't fill out step two but in our example we're just a single taxpayer with one job so we get we can skip the step two let me know down in the comments if you guys want me to do a forum w-4 or you have multiple jobs or a spouse that works maybe i can make one of those videos in the future but for now let's let's go to step three because three claim dependence so this section applies if you're making under 200 000 or over or under 400 000 if you're married um then basically if you have any children under seventeen you wanna multiply that by two thousand enter a number here and the reason why it's two thousand is because that's the child child tax credit and the form w-4 is trying to make sure that you withhold a proper amount of taxes throughout the year and if you have dependents and getting that child tax credit or dependent uh tax credit then the former b4 wants to take that into consideration when withholding your taxes so if you have one child under 17 you'll pick 2 000 if you have 2u you would put 4 000 and so on and then you see the second part of claim dependence multiply any other defense by 500 and the most common example of this is if you're taking care of elderly parents you do 500 for each of those parents so you do 500 for your dad then you do 500 for your mom so in total would be a thousand if you're taking care of both parents but once again in this example single taxpayer one job no dependence we don't have to fill out anything in step three next we'll look at step four the last uh step besides signing and this is other adjustments for a other income is where you enter taxes you want to withhold on interest you make throughout the year dividends or retirement income in our facts a single tax payer with one job no dependents if you're not making that much interest dividends or retirement income you don't have to put anything here but if you're making a lot of interest dividends retirement income you might want to consider putting a number here for the amount of taxes you want to withhold on that amount if you don't withhold any taxes on a large sum of interest dividends or retirement income then when it comes time to file your tax return you might owe a lot of taxes because you didn't withheld withhold any tax on your income the interest income dividend income or retirement income so that lack of taxes you paid throughout the year might cause a penalty or interest and you don't want that to happen right you don't want to pay any penalties or interest to the irs in this example we'll put zero here since the taxpayers has one job and a single doesn't have too much information there next you want to look at 4b 4b in our situation doesn't really apply it only applies if you're not taking your standard deduction in this case single taxpayer is one job no dependence you're most likely going to take the standard deduction so you'd leave 4b blank you'd fill in 4b if you're gonna itemize your deductions and usually people who itemize reductions they own a house and they pay mortgage pay a mortgage or they donate a lot to charity or they have high medical expenses and so those are a couple reasons why somebody might itemize deductions but an example where it's just a single taxpayer with one job we don't have to fill out anything for 4b 4c extra withholding this really only applies if you have more than one job or some other um facts that we don't have in this very simple example so we don't do anything for 4c and in the very end you just you decide your name and date it and you give it to your employer and it's very important that you fill out this form correctly i mean if you forget to if you forget to enter some items into this form you might either withhold too many taxes and get a refund which sounds good at first but i don't think you want to give money the irs when you don't have to that money's probably better off in your hands um a good example of like why you don't want to refund is let's say you get a refund of three thousand dollars what that means is you gave the irs two thousand dollars shot the year that you didn't really have to give to the irs you could have invested that money into the stock market it made around ten percent because that's the average um return on stocks in the stock market or maybe throughout the year your tight title money and you couldn't go out as much and hang out with your friends or go on that vacation that you wanted to go on but maybe if you had that three thousand dollars in your pocket you could have done those things or so that's an example of something like why refunds aren't necessarily the best and then something else that could happen if you didn't file this form correctly is you underpaid taxes and if you underpaid taxes throughout the year then you might be subject to penalties interest that you owe to the irs and nobody wants to be in that situation so it's in you guys best interest to fill this form out as best as you can at the time with the information you have and i hope this this example was helpful for you guys um so yeah you guys will see me back at the screen right now that concludes the video thank you all for watching if you guys want me to do a more elaborate form w-4 let me know i can make a video later sometime in the future going over a form w4 with more elaborate facts and circumstances um i think the plan is for thursday i'm going to release a video on how to fill out form 1040 which is individual tax return form so look forward to watching that thanks again you all for watching take care and i'll see you next video you