Occasionally Nextep's Payroll Department and even company worksite supervisors are asked by an employee, What should I claim on my W-4?
This question is certainly confusing, especially since the answer varies widely from one employee to another.
Personal taxes differ greatly from one individual to the next and depend on a number of household demographics and other factors that have nothing to do with the person's employment. These factors include the number of dependents in the household, marital status, child care tax credits, overall household income, owned properties, and various tax deductions. For this reason, as well as any liability issues that may arise from under or over withholding, Nextep recommends that employers do not counsel employees regarding their personal taxes. For the same reason, Nextep's Payroll representatives are also unable to provide personal tax advice.
Employees can instead be directed to an array of resources provided by the Internal Revenue Service (IRS). This self-service model allows the employee to privately assess the income and household information and determine the best withholding status for his or her individual situation.
- Withholding Calculator: Employees may use this IRS withholding calculator to walk step by step through determining the recommended withholding status.
- Circular E: Updated annually, these tax tables show how much will be deducted from a person's paycheck based on withholding status, pay frequency, and income.
- W-4: Employees who wish to change their tax withholding must submit a new, signed W-4 to Nextep's Payroll Department. A new W-4 is not required each year; it is only required upon hire and when wishing to change the withholding status.
Some employees may require additional assistance in determining tax withholding and deferrals. In these cases, a personal accountant may be sought for more in-depth assessment.
For additional questions regarding paycheck tax withholding and available resources, please contact Nextep's Payroll Department.