Form W-4 allows employees to reflect certain deductions that affect federal income tax withholding during the year. These deductions are used only to adjust withholding and do not represent the final deductions claimed on an income tax return.
Deductions in the Withholding System
Deductions entered on Form W-4 are considered solely for withholding purposes. They are used to reduce the amount of income subject to withholding calculations applied to wages by the employer.
Use of the Deductions Worksheet
The Internal Revenue Service provides a deductions worksheet associated with Form W-4 to help determine an appropriate deduction amount for withholding. The worksheet supports withholding adjustments and does not replace tax return schedules.
Difference From Tax Return Deductions
Deductions reflected on Form W-4 differ from deductions reported on an income tax return. The form affects advance withholding during the year, while tax return deductions are used to determine final tax liability.
Employer Handling of Deduction Information
Employers use the deduction amount provided on Form W-4 to apply withholding tables and formulas. The worksheet itself is not submitted to the employer or the Internal Revenue Service and is retained by the employee.