Understanding Form W-4

The video tutorial explains the importance of Form W-4, which is required when starting a job to determine federal tax withholding. It covers the steps to fill out the form, including personal information, filing status, and optional adjustments. The tutorial highlights the importance of accuracy and provides an example of a young person completing the form. It also discusses exemptions and the potential consequences of incorrect withholding. The goal is to ensure the correct amount is withheld to avoid large refunds or tax liabilities.

What is the primary purpose of Form W-4?

• To apply for a job

• To register for health insurance

• To determine the amount of federal income tax to withhold

• To calculate state taxes

Who might qualify for exemption from withholding?

• Someone who had no federal tax liability last year and expects none this year

• Anyone who is under 18

• All college students

• Anyone who works part-time

What information is required in Part (a) of Step 1 on the W-4?

• Your job title

• Your name and address

• Your employer's name

• Your bank account number

Which filing status should you select if you are unmarried and support a qualifying individual?

• Qualifying widow or widower

• Head of household

• Married filing jointly

• Single or Married filing separately

When should you complete Step 2 of the W-4?

• If you are retired

• If you are self-employed

• If you are a student

• If you have multiple jobs or your spouse works

What is the purpose of Step 3 on the W-4?

• To claim dependents

• To select health benefits

• To apply for a tax refund

• To report additional income

What can you do in Step 4 of the W-4?

• Update your address

• Change your filing status

• Apply for a tax credit

• Request additional taxes to be withheld

Why would Sean not claim exemption on his W-4?

• He filed a tax return last year

• He doesn't know how much he'll earn

• He has multiple jobs

• He is married

Which step requires Sean's signature and date?

• Step 2

• Step 5

• Step 1

• Step 4

What is the benefit of accurately completing the W-4?

• To increase your credit score

• To qualify for government benefits

• To receive a larger paycheck

• To avoid penalties and ensure correct tax withholding