The Deductions and Adjustments Worksheet for the W-4 tax form is a worksheet located on page 2 of the form. This worksheet is used by employees who plan to itemize their deductions or claim credits or income adjustments on their federal income tax return.http://www.cclib.lib.pa.us/irs/taxmap/pub17/p17-020.htm The W-4 tax form is used to determine the amount of money an employer withholds from an employee’s regular paychecks.http://www.irs.gov/publications/p505/ch01.html By law, all employees must fill out a W-4 form when beginning a new job, and employees who need to adjust their withholding must fill out a new form.http://www.irs.gov/publications/p505/ch01.html

According to the IRS, the Deductions and Adjustments Worksheet can be used not only for those who will itemize tax deductions or claim credits and adjustments, but for employees wishing to adjust their withholding to account for certain deductions, such as health savings accounts, moving expenses, and student loan interest, among others.http://www.irs.gov/publications/p505/ch01.html#en_US_publink10007223 The worksheet can also be used be those who have experienced changes in the above circumstances and want to know how those changes will affect their taxes.http://www.irs.gov/publications/p505/ch01.html#en_US_publink10007223

The Deductions and Adjustments Worksheet contains 10 lines of instruction which take an employee through the process of adjusting his or her withholding.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf

• Line 1: Here, the employee enters an estimate of his or her itemized deductions.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf These might include mortgage interest, casualty expenses, taxes, charitable contributions, medical care, and other deductions.http://www.irs.gov/newsroom/article/0,,id=105101,00.html Typically, taxpayers itemize if the total of their itemized deductions exceeds the amount of the standard deduction.http://www.irs.gov/newsroom/article/0,,id=105101,00.html
• Line 2: This line contains the amounts of the standard deductions for those who are married and filing jointly, employees who can claim head of household, and those who are single or married but filing separately.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf Employees enter the amount that fits their situation.
• Line 3: This line instructs the employee to subtract the amount entered into line 2 from the amount on line 1.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf This will enable the taxpayer to know whether their itemized expenses actually exceed the standard deduction.
• Line 4: This line instructs employees to enter the amount of their income adjustments and any additional standard deduction they may be claiming.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf IRS Publication 919 contains information on the adjustments available.http://www.irs.gov/publications/p919/ar01.html
• Line 5: This line instructs taxpayers to add lines 3 and 4 and add any additional credits they may be claiming (found in worksheet 6 of Publication 919).http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf According to the IRS, employees can enter the Child and Dependent Care Credit and Child Tax Credit either here or on the W-4 Personal Allowances Worksheet.http://www.irs.gov/publications/p505/ch01.html
• Line 6: This line allows taxpayers to enter an estimate of any non-wage income they may receive during the year.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf This income can include interest, rental income, unemployment benefits, hobby income, capital gains, and alimony, among others.http://www.irs.gov/publications/p505/ch01.html
• Line 7: At line 7, the taxpayer subtracts line 6 from line 5.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf According to the IRS, if the amount on line 6 is higher than the amount on line 5, an adequate amount of tax may not be withheld.http://www.irs.gov/publications/p505/ch01.html
• Line 8: This line instructs the employee to divide the amount on line 7 by $3650 and enter the result, dropping any fraction that may have occurred.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf If the amount on line 7 is less than $3650, the employee will enter 0 on line 8.http://www.irs.gov/publications/p505/ch01.html
• Line 9: On this line, the employee enters the total number of allowances from line H of the Personal Allowances Worksheet.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf 
• Line 10: This line instructs the taxpayer to total the numbers on lines 8 and 9 and then enter them into line 5 of the W-4.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf Taxpayers who plan to complete the Two Earners/Multiple Jobs Worksheet will also enter this sum on line 1 of that worksheet.http://www.irs.ustreas.gov/pub/irs-pdf/fw4.pdf