The company that I work for is being purchased by another company, which means a stack of paperwork of course. The only thing I am confused about is the W-4 that I need to fill out.
This is the form in question (PDF warning):
I work. Mrs. Geek does not. Our kids are grown and out of the house and therefore are no longer claimed as dependents.
Am I correct in that all I need to fill out is Part 1, check the check box for Married Filing Jointly, and sign it on Part 5, and that this results in the standard deduction? In other words, Steps 2, 3, and 4 do not apply and do not need to be filled out?
Steps 2, 3, & 4 are definitely optional legally speaking. if you skip them you might end up under-withheld and might end up owing a bunch of taxes next April and maybe even a penalty for excessive under-witholding. But there is definitely no penalty as such for leaving them blank when you’d be better off with them filled out.
As you said, you have no working spouse, no multiple jobs yourself, and no kids or dependents. So Steps 2 &3 are financially irrelevant.
Step 4 might be relevant to you if you have significant income not related to this job AND you want to have your wage withholding cover that. e.g you have a LOT of income producing stocks & bonds in an ordinary brokerage account and would rather have money withheld from your paycheck to cover the eventual taxes on that income, rather than going to the bother of making quarterly estimated tax payments to cover those taxes.
The opposite can apply if you have a loss-making business. You can ask them to withhold less from your wages because you know your total taxable income at year-end will be a bunch less than just your wages would imply.
But if you don’t have material income or tax deductions beyond this job’s wages, then Step 4 is financially irrelevant too.
I have a couple of rental properties and I usually end up owing a bit of taxes every April as a result of those. It’s not enough to end up with any sort of penalty though and it’s the way things have been for a few years now, so no biggie. If I understand this form correctly (which based on your response I think I do), this gets me back to the same withholdings that I have now under my current company.
Thanks for the reply! It’s been over 25 years since I have had to fill out one of these forms.