The object of filling out a W-4 is to estimate your tax liability as accurately as possible so only the amount needed to pay your taxes is taken out of your paycheck. If your tax estimate is too small, you’ll end up owing additional money when you file your tax return. If you over estimate your tax liability, you’ll receive a tax refund. How much money is taken out of your paycheck for tax purposes is determined by the number of dependents you claim on your W-4. If you want to receive a tax refund check, claim fewer deductions on your W-4 than you will on your yearly tax return.

The W-4 form controls how much tax planning money our employers take out of our weekly (or biweekly) paychecks to pay our yearly tax liability. The estimated tax calculations are based on our tax bracket (income) and our claimable deductions, usually just the number of dependents we can claim.

But there are a few more specifics that need to be decided on before handing in the form.

First and foremost, you need to examine how you feel about giving the government an interest free loan, in the form of your hard earned dollars. Every time you receive a tax refund all you’re getting is your money – money that you could have had all throughout the year, a little bit in each paycheck. Some people enjoy receiving that lump sum after tax time and don’t mind that they’ve been letting the government use it interest free for the past 12 months. Other people like to have control of all of their money the moment they earn it and dread the thought of allowing the IRS keep more than their share.

After you decide whether you want to continue over paying so you get a tax refund check or would rather have the money you earned when you earn it; it’s time to determine what combination of entries on your W-4 will produce the desired outcome.

Step one: Figuring out your “status”. You get 5 choices: married filing jointly, married filing separately, widow/widower, head of household and single.

If you said “I do” on or before the last day of the year you have to file as married; but just because you said you’d be there for better or for worse does that automatically include tax time? Generally, you’ll pay less in taxes if you file jointly, however there are some exceptions. If you and your beloved can’t agree on some of the particulars of a tax return you may just want to agree to disagree and file separately so each of you are only responsible for your own return. In other cases, if your spouse has high medical expenses or other extenuating circumstances it may pay to file separately. When in doubt, prepare your taxes both ways and see which one gives you the most benefit.

If your spouse passed on within the past two years, you have a minimum of one dependent and you pay for at least half of the upkeep of your home you can file as a widow/widower.

To file as head of household you must have at least one dependent and pay more than half of the upkeep for the house in which the dependent lives.

And when all of the above doesn’t apply you must file as single.

Step Two: Filing in your W-4: The W-4 form is relatively simple, but entering the wrong numbers can leave you either over paying or under funding your tax liability. If you own a home or are claiming other itemized deductions on your tax return you should use the deductions and adjustments worksheet on page two of the W-4 form to calculate the amount that should be entered in line five of the W-4.

If you have two jobs or you are married, look to the appropriate worksheet on page two to help calculate your liability.

If the worksheets are a little overwhelming, you’re prone to scratch-outs or you want to see how changing different amounts will affect your withholding try the IRS withholding calculator at http://www.irs.gov/individuals/page/0,,id=14806,00.html Before you start, have your most recent pay stubs and last year’s income tax return handy – it’ll help.