IRS Form W4 helps employers to withhold the correct amount of federal income tax from your pay. At the end of the tax year, the withheld funds will be released to the IRS. Then, depending on your individual tax return information to the IRS, you will either receive a refund from the IRS or have the opportunity to pay any extra taxes. Businesses with employees need form W-4 in order to take the right amount of federal taxes out of their pay. Employees will need a new Form W-4 each year.