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 recently married in September. Both my husband & I were previously married. We both are employed full-time. I have 1 daughter (8 years old) and he has 1 son (8 years old). I had been filing single, head of household and claiming my daughter. We’re not certain how to file for this 2016 tax season. Should we go ahead & file jointly this year? or since we married in that latter half of 2016 file single still and then for 2017 file married & joint? My husband also owes to the IRS from 2015 & 2014 still. I’m wary to file with him just yet. I also normally receive a large refund and would like to adjust my witholding appropriately so that I get more in my paycheck. advice?
Hi Lisa,
Congratulations on tying the knot!
Based on your current tax situation (and your husband’s), I would suggest your filing status be Married Filing Separately. You mentioned that your husband still owes taxes for 2014-2015. Filing a joint return now would hold you liable for past due amounts owed to the IRS from when your husband was single. Although filing a joint return allows you both to reap many more benefits, your best bet is to get your husband caught up on his past due taxes and then file a joint return together for the current tax year. He can even prepare these returns through our website. Once he does this and mails them to the IRS, he should receive a response within several weeks. You’ll be able to file a joint tax return prior to it being due in April without a problem.
I believe I’m getting myself confused on how to fill out my W4. I’m married, we file jointly. My husband works full time, and I have 2 jobs (one full time and 1 part time). We have 0 children at this time. How should I fill out the forms. He files head of household. Ideally, I would like to have more money on my paychecks rather than a larger refund. Any help or suggestions would be greatly appreciated.
Hi Heather,
The W-4 can be confusing to fill out; even more so when you have two jobs. If you take a look at the W-4, you’ll see that they provide you with a Personal Allowances Worksheet. You are not required to use this or submit it to your employer with the bottom half. You will also see that on page 2, they provide a Tow Earners/Multiple Jobs Worksheet. This is also optional but could help out in your situation. You will be directed here from your personal allowances worksheet.
Now, here is how W-4 allowances affect your overall tax situation. The more allowances you claim, the less is withheld from your paychecks throughout the year to cover tax owed to the IRS. This could result in too little being withheld and a tax due amount to the IRS. If you claim less allowances on your W-4, then more will be withheld from your income throughout the year to cover taxes to the IRS. It’s important to realize that the total amount of tax you’ll pay to the IRS remains the same. The W-4 only determines when you will be paying that tax; throughout the year through withholding or as a lump sum after filing your tax return for the year.
If you would prefer more in your paycheck over an IRS refund after filing, you will claim on the higher side of allowances.
My spouse works and claims 0 dependents. I am self employed and receive 1099’s. We have 3 children at home. I pay quarterly taxes and then pay in at tax time what is left to pay. We never get a refund.
Should my spouse claim 0 or 4 dependents (me, 3 kids)?? Does it really make a difference other than having more money at paycheck time and not having to pay more money in at tax time??
Worried and confused :/
Hi Elizabeth,
Not to worry. It is great that you are making quarterly payments as some taxpayers in your situation wait until they file and then are bombarded with tax due.
The ideal goal for your W-4 form is to have it reflect how you will file your tax return. For example, if he is able to claim four dependents on his tax return, then claiming four allowances on his W-4 form may be a good idea. You do get a bit of leeway when it comes to your W-4 since the total amount of tax that you are responsible for paying to the IRS does not change based on how you complete your W-4. Your W-4 simply adjusts when you pay the tax you owe. The more allowances you claim, the less tax you will essentially pay (have withheld) throughout the year. This can result in a tax amount due after filing if too little was withheld. The less allowances you claim, the more tax you will be paying throughout the year. This could land you a tax refund from the IRS if too much was withheld from your paychecks.
Right now, with your spouse claiming zero allowances, the maximum amount is being withheld from their paychecks throughout the year. Since you are not being taxed initially on your income, that could be why you are still owing come tax time.
I have one child, filing single, living with significant other, not married and claimed 0 on W4. I pay my child’s care expenses and we pretty much split on other child expenses. For 2015, my child’s dad claimed him and we talked about switching off with him. I make more than my child’s dad. Is it a good idea to switch? Would I have to switch W4 forms every year? What would you recommend?
Hi TWatson,
You wouldn’t be required to update your W-4 form each year, however you may want to. Here’s how it works. The more allowances you claim, the less is withheld from your paycheck. This results in more take home pay but could cause you to owe the IRS after filing IF too little is being withheld. The less allowances you claim, the more is withheld from your paychecks. This means less take home pay but a possible IRS refund if too much was withheld. The best idea is to have your W-4 reflect what your tax return will report to the best of your ability. For example, if you are going to claim a dependent on your tax return, claim an allowance on your W-4 for each one to match.
To touch on whether or not it is a good idea to claim your child every other year; yes it typically is. Each year that you are claiming a child dependent, you receive tax benefits. This means increasing your refund amount or reducing your tax due to the IRS. On top of that, you may qualify for the Child Tax Credit. Now this will depend on a few different factors including your income, your child’s age, etc.
Hi, I just started a seasonal job last week, it may end in jan. I have never claimed taxes before including last year i didnt do any taxes since i didnt work. I am not head of the house hold but i have one child. how do i fill out my w4? my boyfriend is head of house hold but he doesnt plan to claim us. I do plan to claim my daughter on my taxes. i get paid $10 an hour . hours vary (6 hours maximum a day) and i work only 4 days of the week. please help me fill out w4 as i never done this before.
Hi CM,
Congrats on the new job!
Based on what you have stated above, you are considered to be of the single filing status. When claiming allowances on your W-4, I would suggest two; one for you and one for your daughter. The more allowances you claim, the less is withheld from your income throughout the year to cover taxes owed. If too little is withheld, then you will owe after filing your return for the year.