How to Fill Out Step 4(b) on Form W-4
Fine-tune your paycheck withholding by properly accounting for your specific tax circumstances on Form W-4, ensuring greater accuracy year-round.
Form W-4 is used by employers to withhold the correct amount of federal income tax from your paycheck. The form guides you through several steps to account for your personal circumstances, ensuring the tax withheld is accurate. This guide focuses on completing Step 4(b), the line for other adjustments and deductions. Properly completing this section can help you avoid having too much or too little tax withheld.
Understanding When to Use Step 4(b)
Step 4(b) on Form W-4 is specifically for taxpayers who intend to itemize their deductions rather than taking the standard deduction. The standard deduction is a fixed dollar amount that you can subtract from your adjusted gross income (AGI) to reduce your taxable income. For 2025, the standard deduction for single filers is $15,000, for married couples filing jointly it is $30,000, and for heads of household, it is $22,500.
Itemized deductions are specific expenses that the IRS allows you to deduct. Common examples include mortgage interest on a primary residence, state and local taxes (SALT), and charitable contributions. The total of your state and local taxes, including property and income or sales taxes, is generally capped at $10,000 per household per year.
You should only consider using Step 4(b) if you expect your total itemized deductions for the year to exceed the standard deduction amount for your filing status. If your itemized deductions are less than the standard deduction, you would not fill out Step 4(b), as you will receive a greater tax benefit by taking the standard deduction.
Information Needed for the Deductions Worksheet
Before you can accurately complete the Deductions Worksheet that corresponds to Step 4(b), you need to gather specific financial documents. The goal is to estimate your total itemized deductions for the upcoming year. A good starting point is your prior year’s federal tax return, specifically Schedule A, “Itemized Deductions,” which lists all the deductions you claimed.
You will need to collect documents that substantiate your major deductible expenses. These include:
- Form 1098, Mortgage Interest Statement, which you receive from your lender.
- Your most recent property tax bills.
- Receipts or bank statements showing your contributions to qualified organizations.
- Records of any significant medical expenses, as these can be deductible if they exceed 7.5% of your AGI.
Step-by-Step Guide to the Deductions Worksheet
The figure for Step 4(b) is derived from the “Deductions Worksheet” located on page 3 of Form W-4. This worksheet walks you through a simple calculation to determine the amount to enter. With your estimated deduction totals gathered, you can proceed through the worksheet line by line.
The first line of the worksheet asks you to enter your total estimated itemized deductions for the year. This is the sum of all the figures you collected, such as your projected mortgage interest, state and local taxes up to the $10,000 limit, and charitable donations.
On line 2, you will enter the standard deduction amount that corresponds to your filing status. Next, line 3 instructs you to subtract the amount on line 2 from the amount on line 1. If the result is zero or less, you should not continue; your standard deduction is higher, and you should not claim deductions on Step 4(b).
If the result is greater than zero, this is the amount of deductions you have in excess of the standard deduction. The final step on the worksheet is line 4, where you enter the result from line 3. You will then take this final number and enter it on Step 4(b) of your Form W-4.