California Form DE 4
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California Form DE 4

Taking out too much, or too little, personal income tax can cause trouble for a Californian. The Form DE 4 is a short taxpayer's form workers fill out with their employer to keep the taxes taken out of their pay on track.

The Form DE-4 is used to calculate how much personal income tax (PIT) a California worker will have taken out of their pay in the tax year. Workers count on DE 4 to plan their income for each pay period in the year.

It is useful for Californians that want to take out a different amount than they can using the federal W-4 for state taxes.

A Well Made Household Plan

The household situation is the main thing the Employment Development Department (EDD) needs to know. California has its own marital statuses. Married, Single or Married with Two Incomes, and Head of Household. There is a difference in the state between a married taxpayer that pays the expenses for a household that has only one income earner and a taxpayer that is married to another taxpayer with their own earned income. Two income couples are common in California and the status fits.

Divorced taxpayers can pay the Head of Household amount. So can legally separated Californians that pay for more than half of the household expenses and take care of a child or a stepchild.

Fill In The Blanks

Each withholding allowance added to the blank on the form lowers the amount taken out of pay. The main allowances are one for the taxpayer, one for the spouse, and one for each child. Workers pay less tax when they take care of a larger family. Blind Californians and couples get an additional allowance.

When deductions will be itemized at the end of the tax year, at tax filing time, to lower the tax amount, the Californian does not have to have the employer take out the full tax amount each pay period. They can add allowances for the deductions that add up to more than the standard deduction.

In 2011, each $1,000 in deductions above the standard deduction amount counted as 1 allowance.

Added Withholding

Californians that want to take out an additional amount to make sure all taxes are paid can specify an additional amount. Planning ahead helps them avoid underpayment. Some workers hand over more money to the state government during the work year to get back a refund, or a larger refund, when they file their taxes.

Underpayments that are too large can make the taxpayer a violator. They have to pay a fine up to $500.

Money Given and Taken

Using the DE 4 makes the tax plan something a Californian can count on. The form has tables that tell a taxpayer how much money to have taken out and worksheets for calculating allowances and tax. A careful taxpayer can pay all their taxes on time.

Source:

California Employment Development Department, Form DE 4 (April, 2011).

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