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!
I am trying to determine how many allowances we should claim. Both my husband and I work outside the home. We both participate in our Employer 401K program and I have an FSA and Dependent Care spending account that totals 5K each year. We have one child and own a home. Currently on my W-4 I claim Married and 1 and my husband claims Married and 0. We are in the 25% tax bracket with both of our incomes added together and with all of these items plus our donations etc, we still owe about $4,000 a year.
How can we get our deductions adjusted where we no longer owe taxes at the end of the year? We are willing to increase our 401K (I’m currently at 6% and he is at 15%) but that didn’t seem to reduce our AGI this year. I thought all of the pretax deductions were supposed to reduce our gross income to have an AGI of less?
Unfortunately, because we do not have access to all of the information you are calculating into filling out your W-4, we cannot best advise you on the number of allowances you should claim. It would be best to consult with your payroll department, as they should be able to assess and give you an accurate value. You can also utilize the IRS allowance calculator to help determine an allowance amount.
Someone told me that they claim “00” on their taxes for part of the year. What does that do?
I meant on their W-4, not on their taxes.
If they claimed 0 allowances on their W-4 form, this means that the maximum amount of taxes are going to be withheld from each of their paychecks by their employer.
Hi,
I have a few of questions related to W-4.
I am married and my wife has no jobs. My first baby will be born in June.
I was wondering if it would be possible to not owe the IRS if I would put down 0 allowances for 6 months and 9 allowances for the rest of the year. If so, how and where can I put down 0 or 9 allowances exactly?
or What is the best option you suggest?
Thank you.
It would be best for you to consult with your payroll department so that they can advise you on this matter. This will be able to give you a more proper assessment on how you many allowances you should be claiming on your W-4.
Hi, I am also confused on this and am sick of not fully understanding what I am claiming and why. I am a single mother, I work 2 part time jobs, cashier by day and server by night. I rent an apartment @ $760/month + gas and electric. I am head of household and have one 3 year old. I would like bigger pay checks but also rely on getting a decent refund. So what would you suggest as a medium for both check and refund? Thanks!
The more allowances that you claim on your W-4, the less taxes get withheld from your checks, and the more income that you get to use during the year increases. A great medium that you would like to meet is, to not be tax liable for a large amount but also to not receive a massive refund next year. You want to ensure that you can get as much of your income now to use throughout the year, rather than waiting next year. It’s best to speak with your payroll or employer on how you should go about allocating your allowances. But the general rule is the more allowances you claim the lower your taxes, the less allowances you claim, the more taxes get withheld through each check cycle.
I recently used the IRS 2017 Withholding Calculator to get an estimate of how many allowances would be appropriate for my situation. Single. No kids. Stable job. estimated yearly income 33k. Based on the most accurate information I can provide, the IRS Withholding Calculator suggests a filing of Single, obviously, and claiming 3 allowances for an estimated refund of between $150 and $200. I’ve heard from others that claiming a single allowance in my situation is advisable, but their own tool suggests 3 based on the numbers. Any thoughts on whether or not I can trust the information and suggestion the IRS tool provided, etc?
It would be best to consult with your payroll department, as they can better gauge your situation and advise you on the best amount of allowances you should claim. Generally, you want to be as close to zero as possible when it comes to owing taxes or receiving a refund. Typically you’ll only fully know the right amount of allowances to claim after you file your return the first time with every job.