Video instructions and help with filling out and completing What Form 2220 Completing

Instructions and Help about What Form 2220 Completing

Hi kids Andrew Schwartz here to discuss how to fill out the w-4 form at work congratulations on landing your job and welcome to the intimidating world of taxes now it's the time to fill out your first IRS tax form the w-4 form if you have already started working your employer has probably already had you complete that form all that matters for this form is the bottom of page 1 once we go over a few basics about the taxes you'll now pay will review the correct way to complete that form if are in less than 60 $300 in 2015 pretty much every employee pays these two taxes on each dollar earned you will pay 6.2 percent of each dollar you earn in Social Security taxes and these taxes go to fund Social Security benefits paid to retirees and disabled citizens you will also pay one point four five percent on each dollar earned in Medicare taxes to fund the Medicare system that provides health care to people 65 and older so for every 100 dollars that you learn 7.65 cents goes to these two taxes that's equivalent to one burrito from Chipotle but that's not all the taxes you might owe on that income you might also pay federal and state income taxes on those wages too while the rules for each state vary you will generally only all federal income taxes if your wages exceed $6,300 in 2015 if you work all year and are in less than sixty three hundred dollars you'll owe no federal taxes on that income unless you have a lot of money in investments in earn more than three hundred fifty dollars in investment income your total income exceeds a thousand fifty here is a problem you want to avoid do with holding tables issued by the IRS a based on what you earn each week in assuming that you will earn that amount each week all year long and not on what you will learn for the whole year for that reason depending on how you complete your w-4 form you might end up earning less than 6,300 dollars during the year but your employer will still withhold federal income taxes from each paycheck when this happens the only way you can get back those taxes that were unnecessarily withheld is by filing a tax return not only will you have to wait until next winter to have the IRS refund you the money that you should already have in your pocket to spend however you see fit filling out the paperwork can be a pain in the neck do by yourself or your parents CPA will charge you or your parents $100 or more to prepare the paperwork so what should you do if you learn less than 6,300 dollars in the calendar year and don't have a sizable investment portfolio in your name then you want to complete the w-4 form claiming exempt to do so follow these instructions included on the w-4 form if your exempt complete only lines one two three four and seven and sign the form to validate it please note that you actually write the word exempt in box 7 just as I have done on this example you'll then give the w-4 form to your employer what happens if you end up earning more than sixty three hundred dollars in wages this year and claimed exempt on your w-4 it's no big deal that's because the tax rate is ten percent on the next nine thousand two hundred and twenty five dollars that's your earn even if you end up earning ten thousand dollars in wages during the year you'll just need to write the IRS a check for three hundred and seventy dollars next winter you won't be subject to any IRS penalties if you own less than one thousand dollars with your tax return if you see yourself passing the sixty three hundred dollar threshold you can always submit a new w-4 form with your employer at that time instructing them to begin with holding federal income taxes or you can just make sure to set aside 10% of your wages that exceed $6,300 and be ready to send that money over to the federal government when you file your tax forms next winter I hope this helps you out the tax system is definitely intimidating but completing your first w-4 form is a great opportunity to begin learning about managing this complex system if you have any questions about how to correctly fill out the w-4 form check out my firm's popular blog post on this topic available at ww-what accountants com or you can type in the exact address as indicated on this slide if you have any questions or comments about this presentation or have ideas for other presentations please let us know you can call my office at