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Each employee must fill out a Form W-4 in
order to have proper amounts of income tax withheld. If an
employee does not fill out a Form W-4, the employer must withhold taxes
as if the employee were single with no allowances. Understand that
there is a difference between withholding allowances and
exemptions. Exemptions determine amounts not taxed on an income
tax return. Withholding allowances determine amounts that decrease
the tax withheld from wages. Things to consider: Employers
are not required to verify the accuracy of allowances claimed. If
an employee claims to be exempt from withholding while normally earning
more than $200 per week, the employer must fill out boxes 8 and 10 on
the form W-4, make a copy, and send it to the IRS.
If an employee claims more than ten withholding allowances, the
employer must send a copy of the Form W-4 to the IRS. If they are
required to be filed with the IRS, copies of Forms W-4 are sent with the
quarterly tax return, Form 941. Employers must keep Forms W-4 on
file for each employee and for at least four years after the date the
employment tax becomes due or is paid, whichever is later |
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