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!
Hi,
I’m single with one full time job. Am I better doing 0 or 1 allowances? Thanks!
Hi Hannah,
In most tax situations like yours, you will be getting a refund whether you choose to claim one allowance or zero. There is a difference though. If you report zero allowances on your W-4 form, then your employer will be withholding the maximum amount of income allowed from your paychecks to cover taxes. If you choose to withhold one allowance, you will see a bit more in each paycheck and less of a refund come time to file your tax return.
Hi
I’m married, me and my wife are living together, we are going to have a child in less than two months,
we moved to live in the US 6 months ago, my wife doesn’t work but I’m about to have a job soon, they asked me about the number of withholding allowances and i don’t know the correct number because i have no idea bout it. I need help in the number of allowances and how you calculate it regarding my statues.
Thanks in advance
Hi Mohammad,
This will depend on a few different factors of your tax situation. You’ll want to take a look at the IRS website page which explains how you should complete your W-4 as a resident alien in the U.S.
hello i am single and have 2 kids an since i started working in 2014 i have never had any federal tax taken out of my paystubs. on my number of allowences in 2014 was 6 and this year it is 8. is that fine. on my w-2 form it never shows the federal.
Hi Adilene,
You may not have income withheld from your paychecks because you are claiming a high amount of allowances on your W-4 form. The more allowances you claim, the less is withheld. The less allowances you claim, the more is withheld. If too little is withheld, then you will owe the IRS. If too much is withheld, then you will be issued a tax refund. You mentioned that on your W-2, you never see an amount for federal withholding. I suggest speaking with your employer about this. You should see an amount here, regardless if it is zero or not.
Hi,
I run a small business, and just got a part time job. My husband has a full time job, we own investment real estate, I have student loan interest, he gets income from ss because of his age, and some pensions. I will be starting my job soon, and am wondering if claiming 0 makes the most sense, to offset any tax owed from my business and maximizes our refund.
oh and we have 0 dependents…
Hi Nia,
Claiming zero allowances on your W-4 will allow for the maximum amount to be withheld from your paychecks for taxes owed, thus reducing your tax bill (or increasing your refund amount).
I am married with 2 kids, head of Household, my Wife works part time (few hours a week) . Our W-4 I claim 1, and she claimed 0. During tax season we file joined. Our combined income is approx. 62K
I want to get more in my Paychecks and get refunds as well during the tax yr. Please advice me the best approach.
Hi ITDAD,
You mentioned that your filing status is Head of Household but that you file a joint return. Just to clarify, make sure that your W-4 forms are reporting that you are married (as opposed to single) as this could greatly affect the amount being withheld. Other than that, it is important to remember that the more allowances you claim on your W-4, the less income will be withheld from your paychecks for taxes. The less allowances you claim, the more income will be withheld from your paychecks. You stated that your wife claims zero allowances. This means that the maximum amount allowed is being withheld from her income for taxes.
Hi,
Thanks for the reply and sorry for the confusion. What I meant is/was: I claim 1 on my Allowances and Wife claims ZERO.
During tax season we file Join/married and claim the 2 kids.
==
I changed my allowances number to 3 just few days ago (My self and the 2 kids)
My Wife’s income is very small, ( currently is less than $5000/yr).
What happens if I increase my allowances number to 4 and during tax season I claim her/my Wife as dependent, so my total dependent will be 3.. The Wife plus the 2 kids.
Please advice.
Thanks
Read more: http://www.rapidtax.com/blog/breakdown-w-4-allowances/#ixzz478zlhwCm
Hi Again ITDDAD,
Thanks for clearing that up. I understand why you would update your W-4 form to reflect your tax return. It is common that taxpayers will have the amount of allowances claimed on their W-4 form match the number of dependents claimed on their tax return. However, it is important to remember that your spouse can typically not be claimed as your dependent. For more details on this, check out the IRS website, which states the following:
‘Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.‘