# How to Figure Out W9 Tax Withholding

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One of the first forms to complete before starting a new job is an Internal Revenue Service document for selecting the amount of money you want withheld for taxes. The withholding amount determines how much is deducted in federal taxes from each paycheck. On this form, you claim a certain number (usually a single digit) that corresponds to an amount that is withheld on each check. Claiming zero results in the maximum amount of taxes being withheld and usually means a refund at the end of the tax year. With a little calculation, you can get a more accurate amount withheld.

## Step 1

Make an estimate of how much money you will make for the current, or next, tax year. If you just got a new job, you can use the annual salary you were quoted. Or you could do a little math. For example, if you recently landed a job making \$15 per hour, and there are only five months left in the year, you can estimate that there are four weeks per month for a total of 20 weeks. The calculation is thus: 20 weeks multiplied by 40-hour workweeks, with pay of \$15 per hour, would be \$12,000. If you earned any money earlier in the year, add that amount to the \$12,000 total.

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## Step 2

Look at the income tax rate schedules to estimate how much you will owe in taxes based on your estimated earnings. The Money Zine website (see Resources) provides the tax rate schedules for 2010.

## Step 3

Log on to the IRS website (see Resources) to use the withholding calculator. Input the details about your tax situation, including how much money you have made and how much you have already paid in taxes. Move through all of the screens answering the questions. When you get to the end, the results will indicate any adjustments you need to make to your withholding amount so that you avoid owing a large sum at tax time.