W4 form Step 4(a)

[crawford88]

What is the name of your state? South Carolina

My employer gave me empty W4 form (Employee’s Withholding Certificate) asking if I want to specify anything in that for the tax year 2022 and if so, I must do it within few days and submit it to the employer. I am expecting some income from other sources (that won't have any withholding) and would like to specify it in Step 4(a) of that W4 form.

If I put some amount (let us say $10,000) in Step 4(a) but, at the end of the year, did not make that much income but make very less e.g., $500 only, what will happen (e.g., will I get refund from IRS?) Is it a crime or violation or create any problem to me if I specify the expected income like that?

 

[Zigner]

No.

 

[crawford88]

Thank you. So, in that case, will I get a tax refund check from IRS for that $9,500 (10,000 minus 500) once I file my year 2022 tax return?

 

[Zigner]

Thank you. So, in that case, will I get a tax refund check from IRS for that $9,500 (10,000 minus 500) once I file my year 2022 tax return?

No, because that's not what the $10k represents. Also, there's no way anyone here can accurately predict what you may (or may not) be entitled to as a tax refund at the end of the year.

The best I can give you is this: If you overpay your taxes in 2022, then you may be entitled to a refund of the amount you overpaid.

 

[not2cleverRed]

Thank you. So, in that case, will I get a tax refund check from IRS for that $9,500 (10,000 minus 500) once I file my year 2022 tax return?

Do you understand what the purpose of the W-4 is?

It's used to determine how much will be withheld from your paycheck to be applied towards taxes.

You only get a refund if more money is withheld than you actually owe.

 

[crawford88]

Thanks again. I got the point.

Is it safe to consider that I will not face any problem if I mention 10K in 4(a) as expected but did little or no income at the end?
Why I am asking one more time is that, the place where I need to sign in that form, at the end, it states "Under penalties of perjury, I declare that this certificate, to the best of my knowledge and belief, is true, correct, and complete."

 

[Zigner]

Thanks again. I got the point.

Is it safe to consider that I will not face any problem if I mention 10K in 4(a) as expected but did little or no income at the end?
Why I am asking one more time is that, the place where I need to sign in that form, at the end, it states "Under penalties of perjury, I declare that this certificate, to the best of my knowledge and belief, is true, correct, and complete."

You won't get in any trouble. It is often stated to be unwise to do so, however, as you will be giving the government an interest free loan as you overpay your taxes during the year. The flip-side of that coin is that, for many people, it's like a savings account that pays out early in the new year.

 

[crawford88]

Thank you so much!

 

[LdiJ]

What is the name of your state? South Carolina

My employer gave me empty W4 form (Employee’s Withholding Certificate) asking if I want to specify anything in that for the tax year 2022 and if so, I must do it within few days and submit it to the employer. I am expecting some income from other sources (that won't have any withholding) and would like to specify it in Step 4(a) of that W4 form.

If I put some amount (let us say $10,000) in Step 4(a) but, at the end of the year, did not make that much income but make very less e.g., $500 only, what will happen (e.g., will I get refund from IRS?) Is it a crime or violation or create any problem to me if I specify the expected income like that?

When you put down that you have 10k in other income from sources without withholding that should cause your employer (if they understand what they are doing) to withhold more tax. I will be honest and tell you that there are many employers who do not understand how the new W4 system works, and therefore make errors in withholding.

When you file your tax return, all of your income is included in calculating your tax, and if you had too much withheld, you will receive a refund, if you did not have enough withheld you will owe tax. There is no crime involved in this process. You could be penalized some if you deliberately do things to cause you withholding to be significantly less than it should be, but there is never any penalty for causing your withholding to be higher than it should be.

 

[crawford88]

thanks so much for the details.

 

[crawford88]

4(a) of W2 states: “Other income (not from jobs). If you want tax withheld for other income you expect this year that won’t have withholding, enter the amount of other income here. This may include interest, dividends, and retirement income.”



I want to sell an antique which I bought for 10 dollars sometime ago, and now it costs around 11,000 dollars and I want to sell it. That’s why I want to put 10,000 dollars in 4(a). Is that expected profit qualified to be specified in 4(a) of W-2?

 

[Zigner]

4(a) of W2 states: “Other income (not from jobs). If you want tax withheld for other income you expect this year that won’t have withholding, enter the amount of other income here. This may include interest, dividends, and retirement income.”



I want to sell an antique which I bought for 10 dollars sometime ago, and now it costs around 11,000 dollars and I want to sell it. That’s why I want to put 10,000 dollars in 4(a). Is that expected profit qualified to be specified in 4(a) of W-2?

It doesn't matter from what source the income is. You could put $1,000,000 in there and it would be fine, except you'd be paying a LOT of extra taxes through withholdings during the year.

 

[crawford88]

Many thanks for the clarification!

 

[adjusterjack]

You could be better off not getting additional tax withheld throughout the year but file and pay estimated tax when you actually sell the item and can more accurately estimate how the capital gain will effect your tax bill.

 

[crawford88]

Thank you!