Navigating Year-End – Reviewing Employee’s W-4 Form

Part 2 – Reviewing Employee’s W-4 Form




The tax law changes with the Tax Cuts and Jobs Act of 2017 are still affecting people as the tax withholding is no longer calculated based on dependents but rather a calculation of “exemptions”. That is why some employees are still caught off-guard that they owe money on April 15.

The “new” W-4 form takes into account multiple jobs, whether or not your spouse works, other income (from rentals, etc.) AND deductions in calculating your withholding.

And don’t forget Ministers are “self-employed” for tax purposes and are not obligated to have any withholding for federal income tax and CANNOT have social security or Medicare withheld. Therefore, most ministers, if they choose, only complete the W-4  line (c) under Step 4 if they want any withholding from their paychecks. This option allows them to choose whatever amount they would like to withhold per paycheck.  These monies at tax time can be applied against any income tax or SECA tax they owe.  See our blog here about their special tax situation.

It’s always a good idea to have employees complete a new W-4 at the beginning of each year.

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