Employees submit Form W-4 to instruct their employer how much federal income tax to withhold from wage payments based on personal status and deductions.

Under-withholding can result in a tax bill in April, plus IRS underpayment penalties and interest charges if you pay less than 90% of your current liability.

Check it annually or immediately after major changes: marriage, divorce, birth of a child, home purchase, or a significant change in income.

The current W-4 form has removed standard allowances. It now uses direct dollar inputs for dependents, deductions, and other income to calculate withholdings.

Employers annualize paycheck wages, calculate the annual tax liability, and divide it by the number of pay periods (e.g. 26 for bi-weekly) to determine withholding.

An option on W-4 Line 4(c) to request a specific extra dollar amount be deducted from each paycheck, which is useful for dual-income households.

Only if you had no tax liability last year and expect to have no tax liability this year. You must write 'Exempt' on the W-4 form.

You must check the multi-job box on W-4 Step 2 or use the worksheet to calculate higher withholdings, as combining incomes pushes you into higher tax brackets.

Employers can withhold tax on bonuses using a flat supplemental rate (typically 22%) or by combining it with standard wages, which can artificially inflate your bracket.

A directive sent to an employer by the IRS if an employee consistently under-withholds, forcing the employer to withhold at a higher rate.