Are These Forms Talking to Me?

Congratulations! You have just been offered your very first job! Granted, it isn’t the job of your dreams but you have to start somewhere, right? And, you can hardly wait for the best benefit of that job… the paycheck! You are day dreaming of the endless possibilities of what you can do with that money when your new boss hands you a stack of papers. She tells you that you must fill these forms before you can receive a paycheck. You look over the forms and you feel like you are reading a different language. Panic sets in. You have no idea what these forms are let alone how to fill them out.

These are two important federal forms: the Form W-4 and the Form I-9. Looking at these two forms can feel like reading a different language, but a language that you know will protect you in the future.

Form W-4

The Form W-4 has one basic, yet very important purpose. The information you provide on your W-4 will determine the amount of federal taxes that will be withheld from your paycheck. By law, your employer is required to withhold federal income taxes from your paycheck (and then give that money to the federal government, of course). The amount of money your employer will hold from each paycheck is determined by the number of allowances that you report on the Form W-4.  Don’t panic again! An allowance is simply a fancy term used to determine the amount of federal taxes withheld from your paycheck. The number of allowances you report will depend on if you are a dependent and if you have any dependents of your own. A dependent is a person who relies (or “depends”) on you for financial support. Children are the most common dependents, but dependents can also include elderly parents, siblings, etc.

The number of allowances you report completely depends on your individual situation and how many dependents you have (and if you can claim yourself as a dependent). Remember this when determining how many allowances to claim:

So, the answer seems simple, right? Always claim as many allowances as you can to have less taxes taken out of your paycheck… unfortunately the answer isn’t this simple. The number of allowances you claim on your W-4 is meant to provide an estimate of your total federal tax liability. The exact amount of Federal taxes you owe is determined at the end of the year when you complete your tax return. Yes, I am sure you have heard all about the dreaded “tax time” …there really is a purpose for that. When you complete your yearly tax return, it will determine the exact amount of Federal taxes you owe. That amount will be compared to the amount you have already paid (you got it… that is why taxes are taken out of your paycheck!).

In summary, the information reported on your W-4 will determine how much money is deducted from each paycheck for Federal income taxes. The amount of money you pay to Federal income taxes from each paycheck throughout the year will determine whether you have to pay the government or if the government pays you at the end of the year.
 

Form I-9

The purpose of the Form I-9 is to verify if you are eligible to work in the United States. The information provided on the I-9 is very self-explanatory and based purely on personal information. However, in addition to filling out the form, you will be required to provide some type of personal identification. This personal identification documentation may include:

• Your passport

• Your driver’s license

• Your Social Security card

• Your school ID card with a photograph

• Your U.S. Military card

• Plus many more options outlined on the Form I-9

Your employer will help you determine exactly which identification they need to see based upon what you have available.

So, remember the following: when starting a new job, you will have to complete both a Form W-4 and a Form I-9. The number of allowances claimed on your Form W-4 will determine how much Federal Income Tax is withheld from your paycheck and therefore, how much tax you will owe at the end of the year. You can view both forms at the following links: