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When starting a new job, one of the first forms you will receive is the IRS Form W-4. The W-4 will play a significant role in your financial life as it determines how much tax your employer will withhold from every paycheck. If you get it right, you can avoid an unpleasant tax bill.

If your goal is to get a tax refund or at least make sure you do not end up paying a lump sum later, how you fill out this form matters.

Why Your W-4 Matters

The W-4 is a bridge between your paycheck and your tax return. Each pay period, your employer sends a portion of your earnings to the IRS based on the information you put on this form. The idea is to match your withholding with your actual tax liability for the year.

If you want a refund at tax time, you will need to have slightly more tax withheld than what you expect to owe. That means tweaking your W-4 so that your employer sends a little extra to the IRS with each paycheck.

Entering Your Personal Details

This is the easy part. You will provide your name, address, Social Security number and filing status — single, married or head of household. Your filing status affects your standard deduction and tax brackets, so make sure that it is correct.

Accounting for All Jobs

If you have multiple jobs or your spouse also works, this step ensures your total household income is factored in when calculating withholding. You have three choices here:

•    Use the IRS online Tax Withholding Estimator for the most precise result.
•    Use the Multiple Jobs Worksheet of the W-4.
•    Check the box in Step 2(c) if there are only two jobs in your household with similar pay.

If your goal is a refund, you may choose to slightly overestimate income here or skip splitting deductions, which will withhold a bit more throughout the year.

Claiming Dependents Carefully

The next step is where you claim children under 17 and other dependents. The more dependents you list, the less tax is withheld from your paycheck. If you would rather get a refund at tax time, you can leave this section blank or reduce the number of dependents you claim. That will increase withholding, resulting in a larger refund later.

Making Adjustments

This step gives you the most control over how much tax is taken out. You have three options:

•    Line 4(a): Other Income - Add any untaxed income, like freelance work, so your employer withholds extra.
•    Line 4(b): Deductions - Enter expected deductions beyond the standard deduction to reduce withholding (useful if you want a bigger paycheck now, not later).
•    Line 4(c): Extra Withholding - Enter a specific additional dollar amount to be withheld from every paycheck. This is the simplest way to boost your refund: pick an amount and watch it add up over the year.

Signing & Submitting

Once you sign and date the form, you are done. Your employer will use it for future paychecks, and you can submit a new one any time your status changes, such as getting married, having a baby or taking a second job.

Fine-Tuning Your Refund Strategy

If you prefer to receive a larger refund instead of a bigger paycheck, aim to have more withheld. Using Line 4(c) is the most straightforward approach. You can also review your withholding mid-year using the IRS Tax Withholding Estimator and submit an updated W-4 if you want to increase the amount.

Keep in mind that over-withholding means you are giving the IRS an interest-free loan, but for many taxpayers, the peace of mind of getting a refund is worth it.