When you start a new job in the U.S., you have to fill out a W‑4 because it’s the form that tells your employer how much federal income tax to take out of each paycheck for the IRS. Without a W‑4 on file, your employer has to default to a standard method that may not match your situation, which can leave you with a surprise tax bill or an unnecessarily large refund at tax time.

What a W‑4 actually does

  • It’s formally called the Employee’s Withholding Certificate, and it’s an IRS form you give your employer, not the IRS directly.
  • It tells payroll how much federal income tax to withhold based on your filing status, dependents, other income, and adjustments.
  • The goal is to get your withholding close to your real tax liability so you don’t owe a lot or massively overpay when you file your return.

Think of it like setting the “tax thermostat” for your paycheck: set it wrong, and you’ll be too “hot” (owing) or too “cold” (huge refund).

Why you fill it out when you start a job

You’re asked for a W‑4 at hiring because your employer must begin withholding taxes correctly with your first paychecks. They are legally required to withhold federal income tax and need your info to do it accurately; the W‑4 is how they get that info.

Key reasons:

  1. Legal compliance for the employer
    • Employers must send the IRS income tax that’s withheld from your pay all year long, not just at tax season.
 * The W‑4 tells them how to apply IRS withholding formulas to your situation in their payroll system.
  1. Avoiding big balances due (or huge refunds)
    • Too little withheld → you may owe taxes and possibly penalties when you file.
 * Too much withheld → you get a big refund, but that basically means you gave the government an interest‑free loan.
  1. Reflecting your personal situation
    • The form accounts for multiple jobs, a working spouse, dependents, and extra deductions or income.
 * Without this, payroll treats you like a generic “default” taxpayer, which may not fit you at all.

What information you put on a W‑4

Most modern W‑4s walk you through steps:

  1. Personal info and filing status
    • Name, address, Social Security number, and whether you’re single, married, or head of household.
 * Filing status affects your standard deduction and how much tax you’re expected to owe.
  1. Multiple jobs or working spouse
    • There’s a section to indicate if you have more than one job or if your spouse also works, so the total household income is considered.
  1. Dependents and credits
    • You can list qualifying dependents to factor in child tax credits or other credits, which reduce how much needs to be withheld.
  1. Other income, deductions, extra withholding
    • Space for other income (like side gigs, interest, etc.), bigger‑than‑standard deductions, or an extra dollar amount you want withheld each paycheck.
  1. Signature
    • You sign and date to certify that it’s accurate; employers can’t change it for you.

Do you have to redo it every year?

  • You don’t need to submit a new W‑4 annually if nothing in your situation changes and your employer already has one.
  • You should update it after major life events like marriage, divorce, new dependents, or big income changes.
  • Many tax pros suggest reviewing your W‑4 each year or whenever your refund or tax bill is very different from what you expected.

Quick comparison: W‑4 vs W‑2

Here’s how the W‑4 you fill out at the start connects to the W‑2 you get later:

[7][1][3] [5][1][7]
Form Who fills it out When you deal with it What it’s for
W‑4 Employee When you start a job or change withholding Tells employer how much federal tax to withhold each paycheck.
W‑2 Employer After year‑end, for tax filing Summarizes what you earned and how much tax was actually withheld.
Your W‑4 is like the instructions; your W‑2 is the year‑end report of what actually happened.

Real‑world example

Imagine you start your first job and don’t claim any dependents or other income on your W‑4, just single filing status. Payroll will withhold a standard amount of tax based on that setup, and when you file your return, your refund or balance due should be relatively small if your situation matches the form. If later you have a second job and don’t update your W‑4s, your combined income could push you into higher tax, but your withholding might still be set too low, and you could owe at tax time.

TL;DR

You have to fill out a W‑4 when you start a job because it’s the IRS‑required way for your employer to figure out how much federal income tax to take out of your pay, using details about your filing status, dependents, and other income. Doing it carefully helps you avoid big surprises—either a big tax bill or an unnecessarily large refund—when you file your taxes later.

Information gathered from public forums or data available on the internet and portrayed here.