What might happen if an employee does not submit a W4 form to their employer?

When an employee fails to submit a W-4 form to their employer, the consequence is that federal income tax will typically be withheld at the highest rate. This is in accordance with the IRS regulations, which allow employers to withhold taxes as if the employee is single with no allowances, thereby ensuring that the maximum amount is deducted from their earnings for federal taxes.

This approach helps the employer comply with the tax withholding requirements without the employee's instructions on their tax preference. Therefore, the employee may receive a smaller paycheck due to the higher withholding rate, and they might also face the possibility of a larger refund when they file their tax return if their actual tax obligation for the year is less than what was withheld.

Understanding these implications emphasizes the importance of submitting the W-4 form to ensure proper withholding based on individual circumstances, which can prevent unexpected tax liabilities or an oversized refund at tax time.