What is the purpose of filling out a W-4 form when starting a new job?

Filling out a W-4 form when starting a new job is essential for documenting what money should be withheld from your paycheck for federal income tax. The purpose of the W-4 is to provide your employer with information about your tax situation, including your filing status, the number of dependents you have, and any additional income you may earn. This allows your employer to calculate the appropriate amount of federal income tax to withhold from your paycheck, which is crucial for ensuring that you do not underpay or overpay your taxes throughout the year. Properly filling out the W-4 helps to manage your tax liability and can prevent unpleasant financial surprises when you file your tax return.