Income · taxes
The form stopped using “allowances” in 2020. In 2026 you still pick a filing status, tell payroll about a second job or a spouse, claim credits, and optionally add extra dollars per check. The goal is not a giant refund. The goal is that April is boring.
Updated 2026-09-08 · 8 min read · 2026 standard deduction $16,100 / $32,200
Payroll withholds using IRS Publication 15-T. Your W-4 is the settings file. Filing status chooses the bracket table and standard deduction. Step 2 raises withholding when two jobs would otherwise each pretend they are the only income. Step 3 subtracts credits (child tax credit, other dependents). Step 4(c) is a raw extra dollar amount per paycheck — the cleanest lever if you have a side hustle, a bonus, or you just want to prepay.
A $3,400 refund is not a gift. It is proof you lent the IRS $3,400 at 0%. The same money in a high-yield savings account would have paid you.
Step 1 — filing status. Single, married filing jointly, or head of household. This is not a personality test. It has to match how you will file. Married filing jointly with two similar salaries and Step 2 blank is how households under-withhold.
Step 2 — multiple jobs. Two W-2s in the house (yours and a spouse, or two of yours). Check the box if the jobs pay about the same, or run the IRS Tax Withholding Estimator / worksheet and put the extra on the higher-paying job only. Do not check the box on both jobs — that over-withholds.
Step 3 — dependents. Qualifying children and other dependents. Put the dollar amount of the credits, not a headcount in the old “allowance” sense. Claim them on one W-4 in the household, not both.
Step 4(a) other income if you have interest, a side gig with no withholding, or a spouse whose job you are not modeling. Step 4(b) deductions only if you itemize above the 2026 standard deduction ($16,100 single, $32,200 joint, $24,150 HOH). Step 4(c) extra withholding is the override. Use the paycheck calculator to size it.
New job. Marriage or divorce. A child. A second job that sticks. A side hustle that is no longer a hobby. A raise that jumps a bracket does not by itself require a new form — only the extra dollars are taxed at the new marginal rate. See marginal vs effective.
Bonuses are often withheld at the supplemental 22% flat rate. That can look “too high” in a 12% bracket and “too low” in 32%. Do not rebuild your whole W-4 around one bonus. Use 4(c) for a few checks or pay estimated tax if you are 1099 — SE tax and quarterly estimates.
Traditional 401(k) already reduces federal taxable wages. Do not double-count it on Step 4(b). It does not reduce FICA (6.2% Social Security up to $184,500 in 2026 + 1.45% Medicare). HSA payroll contributions typically reduce both. Roth 401(k) reduces neither — it only changes the tax at withdrawal. Capture the match first: never skip the match.
Run your numbers: 2026 paycheck calculator (shareable URL, W-4 extra suggestion). Sequence: PayPal playbook. Related: how to read a stub · brackets.
No. Since 2020 it uses filing status, a multiple-jobs checkbox, credits, and extra withholding. “Claim 0” is leftover language.
It means you over-withheld. Aim to break even, then save the difference in an account you control.
Usually yes, or use the estimator and put extra on the higher-paying job only. Checking the box on both jobs over-withholds.
Traditional deferrals already cut taxable wages on the stub. Roth does not. Don't enter the same 401(k) again on Step 4(b).
Educational only. Employers use Publication 15-T; this article is not a substitute. Confirm IRS.gov/withholding and your state form (many states still have their own W-4). Not tax advice.