Definition
The Deductions Worksheet is part of the W-4 form instructions and helps you calculate what to enter in Step 4b. Step 4b reduces your withholding if you plan to itemize deductions on Schedule A and your itemized total exceeds the standard deduction.
The worksheet calculates the excess: total itemized deductions minus the standard deduction for your filing status. Only the excess reduces your withholding — the standard deduction portion is already built into the withholding calculation.
Under OBBBA 2026, the SALT cap was raised to $40,000, which significantly increases the itemized deduction available to homeowners in high-tax states — making Step 4b more valuable for those filers.
How this affects your W-4
Use Step 4b when your annual itemized deductions exceed the standard deduction ($15,000 single / $30,000 MFJ in 2026). Enter only the excess amount — not your total itemized deductions.
Example: Single filer with $28,000 in itemized deductions enters $28,000 − $15,000 = $13,000 in Step 4b. This reduces annual withholding by approximately $13,000 × your marginal rate.
See how deductions worksheet affects your withholding
Use the free W-4 calculator to calculate your exact withholding with your specific situation.
Open the W-4 Calculator →Related terms
Itemized Deductions
Specific deductible expenses you list on Schedule A instead of taking the standard deduction.
Standard Deduction
A flat dollar amount that reduces your taxable income — most taxpayers take this instead of itemizing.
SALT Deduction
The deduction for state and local taxes paid — capped at $40,000 under OBBBA 2026, up from $10,000.