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 and explanations given by the Internal Revenue Service.

For more information, see Understanding Taxes – Students.

Withholding Taxes

Form W-4/MW 507

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.

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).

Withholding Taxes

Form W-4/MW 507

Form W-4/MW 507This 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 Towson University

360224 123-45-1234 John Smith

1111 Something Street

Some City MD 22222 Baltimore City/Baltimore County

Form W-4/MW 507

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.

Section 2: Federal TaxThis 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!

Form W-4/MW 507

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.

Section 2: Federal Tax Withholding

Options for Tax Allowances

Form W-4/MW 507

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 507Section 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.

If you are a full-time student and will earn less than $9,500 in 2012 you can be exempt from state taxes.

TO CLAIM EXEMPTCheck 2 boxes

MARITAL STATUS

Tax Year

TAX ALLOWANCE

Write EXEMPT here

Form W-4/MW 507

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:

Section 3: State Tax Withholding

Below are some examples of how Section 3 can be filled out.

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.

(Social Security/Medicare)

FICA Exemption

Help Line

If you have questions – call the Financial Services Help Line

at (410) 704- 5599, option 1.