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.

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 Towson University 360224 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 Section 2 Tips: 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.

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

call the Financial Services Help Line at (410) 704- 5599, option 1. If you have questions – call the Financial Services Help Line at (410) 704- 5599, option 1.