Transcript Towson University cannot legally tell you how to complete Form W4. You must make your decision based on your personal situation. If.

Towson University cannot legally tell you how to complete Form W4.
You must make your decision based on your personal situation.
If you have a hard time making this decision, you can discuss your
options with a certified tax consultant or other source.
This presentation serves to provide basic examples
explanations given by the Internal Revenue Service.
For more information, see Understanding Taxes – Students.
and
Form W-4/MW 507
Withholding Taxes
 So what does tax withholding have to do with your paycheck?
 How are you affected by the allowances you claim on Form W4?
• Your employer withholds (deducts) specific amount of money from
each paycheck based on how you complete Form W4.
• This tax money is sent to the US government each time you get paid.
• The amount of money that is taken out of your paycheck depends on
how much money you earned and how many allowances you claim
A chart generating the amount of tax money a single person has to pay in
2015 based on income and tax withholdings can be found on the following
link: http://www.irs.gov/pub/irs-pdf/p15a.pdf . A similar chart for married
persons can also be found in this publication.
Form W-4/MW 507
Withholding Taxes
Let’s take a look at an example:
 An employee, who is single and who claimed “1” on his W-4/MW 507, made
$117.50 in a pay period.
 That is in the $115-$120 bracket.
 In the “1” column of the chart below, it says that $6.64 tax is to be withheld.
 Therefore, he will receive a paycheck for about $110.86 ($117.50 - $6.64).
Form W-4/MW 507
This form tells TU how much taxes to withhold each time you’re paid.
TU uses a bi-weekly (every 2 weeks) payroll cycle.
Remember!
• Check off “CT” on the “Payroll system” (top) line.
• Fill out all of the employee information in Section 1 (see example below).
• You must fill out your COUNTY of residence, not country.
• Information about filling out Sections 2 and 3 can be found on the
following slides.
• After successfully filling out the form, sign and date the bottom.
x
360224
Towson University
123-45-1234
John Smith
1111 Something Street
Some City
MD
22222
Baltimore City/Baltimore County
Form W-4/MW 507
Section 2: Federal Tax
This is the amount of federal taxes that will be withheld (taken out) from each paycheck.
Section 2 Tips:
• Check your marital status on Line 3.
• On line 5, enter the number of withholding allowances, such as “1” if you
are single with no dependents (spouse or children).
• You can claim exemption on line 7 if you will not earn more than $3700
in 2012.
• Complete either line 5 or 7 – NOT BOTH!
In the above example, the employee is single and claiming 1 allowance.
Notice how she checked off “Single” in line 3 and wrote “1” on line 5. All other
lines and boxes were left blank.
Form W-4/MW 507
Section 2: Federal Tax Withholding
 Let’s take a look at another example. A single, full time student is
claiming exempt. Notice how she checked off “Single” and wrote
“Exempt” in line 7. All other lines and boxes were left blank.
This student doesn’t think she will earn more than $3700 in 2012.
Form W-4/MW 507
Options for Tax Allowances
George is claiming “0” because he:
→ Wants to have the MAXIMUM amount of taxes withheld from each pay.
→ May receive a large refund when he files his tax return.
Linda is claiming “1” because she:
→ Is claiming the personal exemption for herself now instead on her tax return.
→ May receive a refund when she files her tax return.
Michelle is claiming “exempt” because she:
→ Did not owe any taxes last year.
→ Does not expect to owe any taxes this year.
→ Is a full time student.
→ Will not earn more than $9,650 in 2010 (all jobs combined).
→ Is claimed as a dependent by her parents on their tax return.
Form W-4/MW 507
Section 3: State Tax
This is the amount of state taxes that will be withheld (taken out) from each paycheck.
Section 3 is filled out in the same way as Section 2, only on different lines.
MARITAL
STATUS
 If you are a full-time student and will earn less than $9,500 in
2012 you can be exempt from state taxes.
TAX
ALLOWANCE
TO CLAIM
EXEMPT
Check 2
boxes
Write EXEMPT
here
Tax Year
Form W-4/MW 507
Section 3: State Tax Withholding
Below are some examples of how Section 3 can be filled out.
For a single person who is not claiming any exemptions (i.e. claiming “0” – maximum taxes):
For a married person who is claiming one exemption (i.e. claiming “1”):
For someone who is claiming exempt:
FICA Exemption
(Social Security/Medicare)
There is a student exemption for FICA tax.
To qualify, a student must:
• Be taking a minimum of 6 credit hours. Therefore, a TU
student who works at Towson University is FICA exempt if they
are registered for 6 credit hours or more!
During the summer if you are not taking 6 credit hours,
FICA tax will be deducted.
Help Line
If you have questions –
call the Financial Services Help Line
at (410) 704- 5599, option 1.