Essentially, when you start a job, you are asked to complete a Form W-4, Employee's Withholding Certificate.
Sample W-4 Form
This form is used to help you determine how many dependents you have, your filing status, the amount of deductions you will have or expect to have on your income tax return, as well as whether you want extra withholdings on each pay period. All of these entries are then used to help determine how much should be withheld in federal and state income taxes on your paycheck.
These withholdings are then submitted to the taxing agencies and subsequently reported on your W-2 forms. If you have enough withheld in federal and state income taxes, the amount you owe when filing your income tax return is minimal.
If you had enough taxes withheld, you will get a refund.
If you did not have enough withheld, you will owe taxes when you file your income tax return.
If you determine based upon your tax return for 2020 that you owe money to the taxing agencies, you can update your W-4 form with your employer. Please see the link below for additional information on how to update your W-4 form.
How to update your W-4 in TurboTax
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