The last thing you want to do is frantically run up to your boss asking “How many allowances do I claim on my W-4?”.
Being aware of the number of allowances you are claiming on a Form W-4 [Employee’s Withholding Allowance Certificate] is important for a variety of reasons. Most importantly, the number of allowances you claim on a W-4 determines the following;
- how much tax will be taken from your income (aka the withholding amount)
- the size of your tax refund
Steps to filling out a W-4
You’ll need to follow four simple steps when filling out your W-4 Form:
- Fill out your personal information (Name, Date of Birth, Address, Marital Status)
- Know the number of personal and dependency exemptions you are claiming on your tax return.
- Based on the number from step 2, use that number to help determine your number of allowances.
- Don’t forget to sign the W-4 and turn it into your employer!
The allowances you claim while filling out a W-4 if you are single will differ from the allowances you claim if you are married or have kids.
Claiming zero allowances
- The maximum amount of tax is withheld. Meaning, when it comes time to file your tax return you will most likely receive a refund.
- You’re being claimed as a dependent on someone else’s tax return.
Claiming one allowance (ideal if you are single with one job)
- You’re single and have one job. Claiming one allowance will most likely result in a refund when you file your taxes.
Claiming two allowances
- You are single. Claiming two allowances will get you close to your tax liability but may result in tax due when filing your taxes.
- You’re single and work more than one job. Claim one allowance at each job or two allowances at one job and zero at the other.
- You’re married.
Claiming three allowances
- You are married with one child.
Claiming additional allowances
- File as head of household if you are eligible. You are able to claim additional allowances.
- You had at least $2,000 of child or dependent care expenses that you plan on claiming credit
- You’re eligible to claim the Child Tax Credit
Can I fill out a new W-4 form?
Yes, employees can submit a new W-4 form to their employee at any time during their employment. Have you recently started a second job, had a baby, or tied the knot? Life changes such as these should encourage you to update your W-4 withholding.
A great tool to help you while filling out a W-4 is the IRS Withholding Calculator, located on the IRS website.
Claiming zero allowances means less take home pay, but a bigger tax refund during tax season.
The number you report on a W-4 will ultimately determine your take home pay and your tax refund. Don’t write down any number. Take the few extra minutes to really assess your situation and fill in the W-4 accordingly. By doing so you’re less likely find yourself in a difficult financial situation.
Then, when you’re ready to file your taxes, you’ll have a heads up on whether or not you’ll be receiving a tax refund!
Hello, upon doing our taxes this year my husband ends up owing money. Not sure how, but now our circumstances have changed. We are married (obviously), have 1 child, and I do not work….how should he fill out his w4 so we will not owe money next year??? Getting a refund is nice but I wouldn’t mind having extra pocket change throughout the year!
Hi Jackie,
You didn’t mention how many allowances he is currently claiming on his W-4 form which caused him to owe for the tax year. However, in order to not owe this year, he’ll want to update his W-4 to claim less allowances than currently. The more allowances he claims on his W-4, the less will be withheld from his income for taxes owed; ultimately leading to a larger tax bill or smaller refund after filing. The less allowances he claims on his W-4, the more income is withheld from his paychecks. If too much is withheld, a refund will be issued. The actual amount of tax he is responsible for remains the same. Claiming zero allowances will allow his employer to withhold the maximum amount per paycheck. Taxpayers will typically claim zero if they desire a refund after filing instead of owing.
Hi, I am single with no children and am currently claiming zero allowances. I make around 26,000-28,000 per year I am thinking about raising my number of allowances to get more in my paychecks. What is a good number of allowances to claim for my situation? I don’t want to owe anything when tax season comes around.
Hi Shannon,
It is common for single taxpayers with one income and no dependents to claim one allowance on their W-4 and still receive a refund come tax time.
I made $52679 last year (2015). When I filed my Tax-return last month, $3,700 was all I got back from the FED and NE state. I always claim one and I have a child and a wife. I work 40 to 80 hours per week (one job). Should I change something in order to get more money in the next year filing?
Hi Jemith,
Something to keep in mind when it comes to paying taxes to the IRS is that you will be paying the same amount whether it is throughout the year (by withholding from paychecks) or paying the bulk of it after filing your return for the year. The more allowances you claim on your W-4, the less is withheld from your paychecks. The less allowances you claim on your W-4, the more is withheld from your income throughout the year. If too little is withheld, then you will end up with a tax refund. In order to maximize your refund, you can claim zero allowances. This allows your employer to withhold the maximum amount of income to go to tax due.
Hello,
Im a young woman living in the us for the first time, under an o1 visa, with only one employer, a big company. So I am single and one job. How many allowances should I file for?
I have settled it up to 3, then my bi weekly paycheck was scary how much money was taken out. Almost 1500USD. Is that even possible? It would be almost 3k per month.
I would appreciate a lot any help/advice. Thank you!
Belle
Hi M,
It was a good idea to take a look at how much is being withheld from your paychecks. Many people don’t catch this until it is too late to do anything about it. Claiming three allowances should not cause such a high amount of your income to be withheld. I strongly suggest speaking with your payroll department (or whoever is responsible for reporting your W-4 information within your company. Based on the information you’ve provided above, this sounds like a mistake was made.
Once you have this figured out with your payroll department, you can calculate how many allowances to claim based on your tax situation. It is important to know that the more allowances you claim, the less income will be withheld from your paycheck to cover taxes owed. The less allowances you claim, the more will be withheld from your paychecks. If too little is withheld, you will owe the IRS after filing for the year. If too much was withheld, then you will be issued an IRS refund.
Married with two kids, I work full-time but my wife does not work at all. I have been claiming two, should I be claiming three?
Hi Travis,
Unfortunately, it is hard to say exactly how many allowances you should be claiming based on the information provided above. However, it is important to realize that the amount of tax you pay (in total) remains the same. Your W-4 form will help you figure out whether you’ll pay more throughout the year from your paychecks or if you’ll pay more after filing your tax return. You see, the more allowances you claim on your W-4, the less is withheld from your paychecks. If too little is withheld, then you will end up owing the IRS the difference after filing. The less allowances you claim, the more that’s withheld from your paychecks. This can result in a tax refund if too much is withheld throughout the year.