What should an employee do if they want to change their withholding allowances?

An employee should submit a new Form W-4 to change their withholding allowances because this is the official document that informs the employer of the changes an employee wishes to make regarding their federal income tax withholding. The W-4 form provides specific details about the employee's personal circumstances, such as their filing status and the number of allowances they wish to claim, which directly affect how much tax is withheld from their paycheck.

Submitting a new W-4 ensures that the employer has the correct information required to adjust the withholding amounts accordingly. It is a formal process that all employers recognize and accept to implement the changes promptly and accurately.

Other methods, such as notifying the employer verbally or requesting a payroll adjustment, may not guarantee accurate updates or could lead to misunderstandings about the amount of withholding to apply. Filing a new tax return is unrelated to changing withholding for the current paychecks, as tax returns are meant for reporting income and tax owed for the previous year rather than adjusting withholding allowances for the current year. Thus, the most appropriate and effective method for an employee to change their withholding allowances is by submitting a new Form W-4.