Tips on filling out the IRS W4

Have you been shocked at your witholdings on your W2? A common question is "am I filling this out correctly?". This might help you.

Filling Out Form W-4 to Account for Tax Law Changes for 2025

2025 Federal Income Tax Withholding

One, Big, Beautiful Bill Act (OBBBA) contains several new or enhanced deductions that individuals can claim. Many of these deductions are available beginning in 2025. If you are an employee and want to account for these deductions in the income tax withheld from the remainder of your paychecks in 2025, you must submit to your employer a new 2025 Form W-4.

You may account for these deductions and update your withholding: Manually by using the deductions worksheet PDF and inputting the result in Step 4(b) of the 2025 Form W-4.

The IRS Tax Withholding Estimator (TWE) is not yet updated to reflect certain provisions of the OBBBA. However, the TWE has been updated to account for the increased standard deduction and child tax credit amounts from OBBBA.

If you do not have the OBBBA deductions for qualified tips, overtime compensation, qualified passenger vehicle loan interest, or seniors, then you could use the TWE to account for the increased standard deduction and child tax credit. Importantly, you can use either the TWE or the worksheet, but not both, to update your withholding for the remainder of 2025.