How to Fill Out A W4 Form and When to Update Your Tax Withholdings
- Nisha Mehta, MD
- Apr 10
- 10 min read
If you’re a W2 employed physician, you’ll be asked to complete a form W-4 during onboarding at a new job. This will tell their employer how much tax to withhold from each paycheck. For many doctors, this might be the only time you look at or think about this form. However, if you receive a large refund or end up owing a significant amount when filing your tax return, you may find yourself in the position of not wanting to give the government a tax free loan for the year or realize that having to make a huge unexpected payment in the spring is less than ideal. If this is the case, it’s likely time to recalculate your federal income tax withholdings and update your W-4 with your employer for future paychecks. Below, we provide a guide on how to fill out a W4 form, how to determine which deductions, credits, and adjustments to claim, as well as tips on when to consider adjusting your W4 withholdings.
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What is a W-4 form?
A Form W-4, officially known as “Employee’s Withholding Certificate,” is an official tax document from the IRS that an employee fills out and provides to their employer. Employers use the W-4 to determine how much federal income tax to withhold from employees’ paychecks.
As your W-4 tells your employer how much federal income tax to withhold, it directly impacts whether you owe taxes or get a refund when you file your tax return, so you’ll want to take the time to complete it as accurately as possible, and update it as necessary to prevent large refunds or payments come tax time.
Depending on your employer, you may fill out the full Form W-4 provided by the IRS, or you may be asked to provide the relevant information from the form on your employer’s HR portal, especially if updating your tax withholdings at a current job. Regardless of how you provide the information to your employer, it’s good practice to review the current W-4 form, as it provides reference information to help you complete all information required, as well as a link to the IRS’s tax withholding estimator.
Your employer should provide you with a copy of the form during your onboarding process. If they don’t, you can download the current version of the W-4 directly from the IRS website. The IRS periodically updates this form.
In the past, physicians could claim allowances on their W-4, which would lower the amount of federal income tax their employer withheld from each paycheck. The Form W-4 underwent a significant change in 2020, and the current (as of 2025) W-4 no longer references allowances. The methods for lower withholding have changed to claiming dependents, credits, and deductions, as we’ll cover below.
When do I need to fill out a Form W-4?
Doctors will be required to fill out a Form W-4 when starting a new job. Once your employer has a W-4 on file, that form and its corresponding federal income tax withholding amount stay active until you update it with your employer. Generally, your employer will not ask you to update your W-4 unless there is a major change by the IRS.
However, there are several common reasons why you may want to provide an updated W-4 to your employer, including:
Changes in dependents
A large tax refund implying that you’re over-withholding
A large tax bill implying that you’re under-withholding
We cover more reasons when you might need to update your W-4 below.
How to fill out a W4 form for tax withholdings
Below, we cover a step-by-step guide to walk you through a W4 form. These steps align to the numbered steps on the actual W-4 form (current version 2025).
Step 1: Enter your personal information
Enter your name, social security number, current mailing address, and your tax filing status. Single, head of household, and qualifying surviving spouse are easier filing statuses to determine with the guidance on the form, but married physicians may wonder if they should file married filing separately or married filing jointly. Generally, it’s better for married doctors to file married filing jointly. There are some situations, however, where it can be beneficial to file separately. We cover this in more detail in our tips and checklist for filing your tax return.
Step 2: Account for multiple jobs in the household
As federal income tax is a progressive tax system that works on marginal tax brackets, the total amount of income tax you owe for a year generally depends on the total income into your household (though married filing separately can be an exception).
To correctly calculate your tax withholdings, all income should be considered when completing your W-4 form to accurately calculate your taxes based on your marginal tax rate.
For other jobs, consider:
If your spouse has a W-2 job
If you have another W-2 job
If your spouse is self-employed or a 1099 contractor
If you have side gig income
If you or your spouse has pass-through income from a business that you claim as part of your tax return
While step 2 mentions jobs, it’s also important to consider other large income sources doctors may have, such as:
Real estate investment income
Taxable investment dividends, sale proceeds, and/or interest income
Social security or other retirement income (pensions, 401(k) distributions, etc.)
Step 2 has a checkbox you can select. Physicians typically should only check this box if:
There are only two job incomes that are reported on your tax return -and-
If the pay at the lower paying job is more than half the pay of the higher paying job
If you check the box in Step 2, you’ll want to do the same for your W-4 for the second job as well.
If you have multiple jobs/income sources, you’ll want to complete Steps 3 and 4 for only one job. Leave Step 3 and Step 4 blank on W-4s for other jobs, or you will end up withholding extra taxes on multiple income sources, which can cause a large refund. A large refund means you loaned the federal government money interest free for part of the year that you could have otherwise used in your budget to maximize your financial goals.
Generally, you’ll have the most accurate withholding if you complete Step 3 and Step 4 on the Form W-4 for the highest paying job. If the highest paying job is a self-employed business or is 1099 income, this may not be possible as you won’t complete a W-4 form in these situations. In this case, it’s likely you will need to send quarterly estimated tax payments to the IRS.
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Step 3: Claim dependents and other credits
Completing Step 3 depends on your income and your filing status. As of 2025, if your total income for the current year will be $400,000 or less if married filing jointly or $200,000 or less for all other instances, you may be able to lower your withholdings by claiming dependents.
In some cases (especially for dual income physician families) where you need to adjust your withholding to have additional taxes taken out of your paycheck, you may choose not to claim dependents, even if you have them, so that you don’t end up with a tax bill at the end of the year for under-withholding. .
To qualify for the child tax credit and count as a qualified dependent, per the W-4 instructions provided by the IRS:
“The child must be under age 17 as of December 31,”
“Must be your dependent who generally lives with you for more than half the year,” -and-
“Must have the required social security number”
The W-4 will walk you through how to total the amount for your specific situation to include in Box 3 of Step 3.
Other credits you may be able to adjust your withholding for in Step 3 include:
Other dependents, such as a qualifying relative or older child
Foreign tax credits
Education tax credits
To account for these credits in Step 3, you will need to estimate the credit amount you’ll receive for the year and include it in the total amount for Step 3. This can be very situationally dependent. The IRS’s official tax estimator can help guide you, but if some of these credits apply to you and you’re unsure of the tax implications, we recommend working with an accountant.
Learn about considerations and costs when choosing an accountant.
Step 4: Account for other adjustments to your tax withholdings
Step 4 is where you adjust your withholdings for other income and deductions. This is especially important if you have any additional income sources, job or otherwise, that we mentioned in Step 2, though remember you only want to fill this out on one W-4 form or take them into account when making estimated tax payments versus adjusting a W-4 so you don’t overwithhold.
Line 4(a): On line 4(a), you can enter the total amount of income for the year from other sources that you want to withhold taxes for. Note, this is not the amount of tax you want withheld from that income source, but the total amount of income itself. This is often the best place to include income such as dividends, interest, retirement income, and potentially smaller amounts of side gig income. If you have these income sources and they are highly variable, you may either want to make estimated quarterly tax payments or ensure you reassess your withholdings and adjust your W-4 throughout the year.
Line 4(b): If you itemize your deductions versus taking the standard deduction, you can reduce your withholdings to account for deductions in this line. Some deductions can apply even if you take the standard deduction, like a deduction for some student loan interest. Learn more about deductions on our guide to filing your taxes. This, like credits, can be very situationally dependent. Page 3 of the IRS’s W-4 form provides a worksheet to help you determine deductions. You will not provide this worksheet to your employer, but it will help you complete Line 4(b) to provide them the relevant information. The IRS tax estimator can also help guide you here.
Line 4(c): This line allows you to add any extra tax you want withheld from your paycheck. Unlike Line 4(a), this is the tax amount, not the income amount you want to withhold taxes for. When entering the additional tax amount here, you’ll need to specify the amount per paycheck, not the amount for the year.
If you have a simple tax situation with a W-2 job without many additional income sources, filling out a W-4 likely won’t be complex. If you have a few income sources, and they’re predictable, the IRS estimator can be a great resource to help walk you through completing the W-4 form for your specific situation. If you have a more complex tax situation with multiple income streams, especially variable ones, you’ll likely need to spend more time evaluating your taxes throughout the year and may want to enlist the professional services of an accountant to help you maximize your tax strategy.
Step 5: Sign your W-4
Congratulations, you’re almost done! All you need to do to complete your W-4 is sign and date it at the bottom. Once complete, give the signed form to your payroll or human resources team.
If they use an online payroll or HR system, you may need to provide the numbers from your completed W-4 electronically through their system instead. Having the completed paper form can help expedite the process online as you will already have all your calculations determined ahead of time.
When should I update my W-4 for tax withholdings?
Your employer will keep your W-4 on file throughout your employment with them. If your personal situation changes and impacts your federal tax obligation, you’ll want to adjust your W-4 to update withholdings from future paychecks.
Situations where you should consider adjusting your W-4 include:
You received a large refund on your last federal income tax return
You owed a large tax bill when you filed your last recent tax return
You started or ended a side gig or side business
Your spouse started or ended a new job, side gig, or business
You entered or got out of an investment that provides taxable income
You purchased property, such as a primary residence or real estate property, especially with a mortgage
You got married or divorced and/or your tax filing status changed
You had a child, adopted a child, or a child had their 18th birthday
How do I adjust my W-4 withholdings?
To adjust your W-4 withholdings, you’ll need to complete a new form W-4 and provide your employer with the updated information for Steps 2 - 4. The changes typically take place for your next pay cycle, but check with HR to be sure. When making changes to your W-4 withholdings, the IRS tax withholding estimator can help you assess what you’ve withheld in taxes so far for the current year, project your total tax bill, and then help you adjust for the remaining pay periods in the year to account for the differences.
Again, the more complex your financial situation, the more likely you’ll want professional help to ensure you don’t end up in a situation of underwithholding and owing taxes and penalties, as the withholding estimator won’t always provide a 100% accurate estimation, especially if your income is highly variable.
Conclusion
For W-2 employees, having an accurate W-4 is crucial to helping ensure you withhold the proper amount of federal income taxes throughout the year so you don’t end up with a huge refund or tax bill. Neither situation is ideal. Your employer only knows what they pay you, so it’s important to adjust your W-4 withholding by providing information based on other factors that influence your tax liability, such as additional income streams and tax deductions and credits. For physicians with more than one household income, it’s important to only withhold extra from one source so you don’t accidentally overwithhold.
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