Remember: You can help a new hire by explaining the W-4 form and providing information about the choices, but you should not influence the worker’s responses. The employee is ultimately responsible for the allowances he/she claims. Although you can’t influence how an employee completes the W-4, you can respond to the following questions as follows:
1. “Can I choose complete tax exemption?”
You must meet specific IRS criteria to claim tax exemption. In general, this means you can be claimed as a dependent by another taxpayer and you received a full refund last year (or expect to receive a full refund this year) due to no tax liability.
2. “How do allowances work?”
Basically, the fewer allowances you claim, the more federal income tax withheld from your paycheck. In turn, the higher the number of allowances, the less federal income tax withheld.
3. “Can I change my W-4?”
Yes. You can update your W-4 forms for a variety of personal or financial reasons, such as marriage, divorce, a change in dependents or a significant salary increase. Unlike with health insurance with open enrollment restrictions, you can change your W-4 as often as you’d like throughout the year.