The IRS Form W-4 is used so employer can withhold the correct amount of federal income tax from their employees. Ideally the amount of tax withheld  ... more>>will correspond to the amount of tax due on the 1040 form. When completing the Form W-4 an employee is trying to calculate the number of allowance she or he will have based on her or his income for the year. At the end of the year if the amount of tax due is different to that as determined by the Form W-4, one will have either a refund or tax liability. The aim of the Form W-4 is to alleviate massive cash flow fluctuations in the tax year and make for a more even and balanced collection. When it comes to a Form W-4, no interest is paid on over-withholding but penalties are levies on under-withholding beyond a certain limit. Once one fills out all of ones financial and taxable information in the Form W-4, the IRS will respond by giving the taxpayer an assessment. Because of the complex nature of the Form W-4 it wouldnt be a bad idea if one used the services of an accountant to help fill out the form.

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