W-4 Tax Form is extremely important in the payroll procedure because it educates the employer on the amount of withheld federal income tax to be imposed on the wages of an employee. It ensures that the withholding is in accordance with the general tax scenario of the employee including dependents, filing status and other income factors. It is used to determine a correct amount of withholding according to the IRS rules by employers. Maintaining the form ensures that there is no under- withholding and this could lead to an increase of the tax bills or over with holding and this will lead to reduction in the take-home pay that is not necessary. The W-4 is given the mandate of enabling the taxpayers to have more control on their income, financial planning, and end-year tax liabilities.
0
