How to Complete the 2025 W-4 Form: A Simple Guide for Household Employers and Employees

Each year, the IRS releases an updated W-4 form, and while it's not mandatory for employees to fill out a new one annually, it’s a smart move to review it. Adjusting withholding helps employees avoid surprises like a big tax bill or an oversized refund at tax time.

For household employers, understanding the W-4 is equally important. New hires must complete one, and it’s wise to encourage current employees to review theirs. This guide will walk you through the key steps, updates for 2025, and why the W-4 matters for both employers and employees.

What Is the W-4 Form and Why It Matters

The W-4, officially called the "Employee’s Withholding Certificate," tells employers how much federal income tax to withhold from an employee’s paychecks. Accurate withholding ensures employees aren’t hit with unexpected taxes later.

Since 2020, the W-4 has no longer used “allowances” (thanks to the Tax Cuts and Jobs Act). Instead, it focuses on simple, clear instructions to better match withholding to an employee’s financial situation.

The 5 Steps of the 2025 W-4 Form

Enter Personal Information

• Every employee must complete this section.
• It includes name, Social Security number, address, filing status (like Single, Married Filing Jointly, or Head of Household).
• If an employee skips this step, employers must withhold taxes at the “Single” rate.

Multiple Jobs or Spouse Also Works

• This step applies if the employee has more than one job, or if a spouse also works and the couple files jointly.
• They can:
  • Use the IRS Withholding Estimator for the highest level of accuracy.
  • Complete the Multiple Jobs Worksheet (on page 3 of the W-4).
  • Check the box if only two jobs are involved and pay is similar.

Claim Dependents

• Employees with dependents may be eligible for credits.
• If total income is under $200,000 (or $400,000 for joint filers), employees can claim:
  • $2,000 per qualifying child under 17.
  • $500 for other dependents.

Other Adjustments (Optional)

• Employees can adjust for:
  • Other income (like side a gig) that isn’t being accounted for in payroll withholdings by an employer.
  • Itemized deductions that are more than the standard deduction ($15,000 for single filers, $30,000 for joint filers in 2025).
  • Extra withholding if they want more tax withheld per paycheck.

Sign and Date

• No signature = no valid W-4! This step is simple but critical.

What’s New or Different for 2025?

While the overall structure remains the same, key figures like the standard deduction have changed:

• $30,000 for Married Filing Jointly
• $15,000 for Single or Married Filing Separately
• $22,500 for Head of Household

These adjustments impact who might benefit from itemizing deductions (Step 4b).

Common W-4 Mistakes to Avoid

Skipping the Form Entirely
Employers are legally required to have new hires fill out this form. Also, if a new employee doesn’t complete a W-4, you (the employer) must withhold taxes as if they’re Single with no adjustments. This could result in higher-than-necessary withholding.

Claiming "Exempt" Without Qualification
While it may be tempting for employees to mark themselves as "exempt," doing so incorrectly can lead to big tax liabilities. Only employees with zero tax liability last year and expected zero this year should claim exempt. For most household workers, this won’t apply.

Ignoring Step 2 (Multiple Jobs)
If an employee (or their spouse) works multiple jobs, not accounting for it can lead to under-withholding — and a big tax bill later.

How Employers Can Help

Remind Employees to Review Their W-4s
A lot can change in a year — marriage, kids, side jobs, or even changes to the tax law. Encourage employees to review their W-4s annually.

Be Ready to Answer Questions
Some employees may not understand how withholding works. Point them to the IRS Withholding Estimator for personalized guidance.

Ensure Proper Withholding for New Hires
When you onboard new employees, make sure they fill out a W-4.

Helpful Resources

• 📝 Download the 2025 W-4 Form (Direct from the IRS)
• 🔍 IRS Tax Withholding Estimator (Recommended for employees who aren’t sure how to complete Step 2)

Final Thoughts
Accurate withholding creates a smoother tax season for everyone. By helping your household employees understand the importance of their W-4, you empower them to avoid tax-time surprises. Need more guidance on payroll and tax compliance for household employees? HomeWork Solutions is here to help.

Do you have questions about managing taxes for your household staff? Contact us today! We’ll take household payroll and taxes off your hands making it simple and stress-free.