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!
My husband and I both have jobs as independent contractors, meaning no taxes are taken out of our checks. I was recently hired for a regular job that I’ll work in addition to that. On my W-4 I claimed 2 allowances because we need the higher take home pay. But now I’m wondering if that is setting us up for having to pay too much on our income taxes. Any thoughts or suggestions?
Hello,
My wife and I each claim one allowance. We are a married couple with no children and make a total of about 115k a year. We end up owing a significant amount each year. Why is that? It seems it should be much closer to zero.
Hi there,
I am married & have one child who I claim for taxes, but my husband & I file separately because he owns his business, is self-employed & that’s what his accountant tells us to do. This is the first year we can claim our child & this is the first time I’ve thought about doing a new W-4. I want more to bring home throughout the year & am worried less about the refund at the end of the year but certainly do not want to pay. So my question is should I check Married or Married but withhold the higher rate using the same allowances I do on my 1040?
To determine your optimal withholdings for your W-4, you can use the IRS Withholding Calculator to help you determine how many allowances you should claim on your W-4 Form. Click here to try the IRS Withholding Calculator.
It would be best to speak with payroll on this matter, as they will be able to better assess your situation and give you an accurate number of allowances that you should claim on your W-4. You can also choose to us the IRS allowance calculator to determine this number of allowances as well.
I am single and no dependents, but have my W4 showing as 3 exemptions, I want to have a little more money on my paycheck but don’t want to owe the IRS at Tax season. I would like to receive a refund. What is the best number of exemptions I should file as.
The IRS has a tool to help you determine how many allowances you should claim on your W-4 Form. Click here to use the IRS Withholding Calculator.
I am single and claim my college age daughter on my taxes. I currently earn about $50,000 a year and claim zero on my taxes. My ex-husband just retired and I am now receiving an additional $2,000 from my portion of the retirement.
My question is:
What if any taxes should i claim on the retirement check i receive monthly so i don’t owe taxes at the end of the year?
thank you!
Unfortunately we cannot advise or determine these figures for you as this blog is for clarification purposes on how the W-4 form generally works. Please consult with the handler of your retirement income.