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 a single teacher making $55,000 a year and I do not see much of an increase from my past employer where I made $15,000 less, claiming zero… The same as I am now. Like I said, I am claiming zero on my paycheck but I just changed that to “1.” Will that make much of a difference, in terms of my paycheck size? If so, would anyone know about how much? Any help would be appreciated greatly!
Hi Gabriel,
Claiming one allowance as opposed to claiming zero will definitely make a difference. Claiming zero allowances is allowing the maximum amount to be withheld from each of your paychecks.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
Hi, I currently have 3 jobs (1 full time, 2 part time). I have no dependents and my total income for all 3 jobs is over $50,000. I would like to ensure that all taxes are paid, with the possibility of a refund. Should I claim 0 allowances on all 3 W-4? I definitely do not want to pay back taxes.
Hi Lynn,
Claiming zero allowances would definitely be most beneficial to you since you would prefer to not owe money at the end of the tax year.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
I also suggest taking a look at the IRS Withholding Calculator. It only takes a few minutes to complete and will give you the most accurate amount of allowances to claim in order to reach that break-even point at the end of the tax year.
I filed highly for a good number of months throughout the year as I had a very high garnishment I had to pay for a while, and needed to claim high to make ends meet. I’m now concerned I will owe thousands when it’s tax time. I’m a single parent BUT, it’s not my year to claim my daughter, so the only allowance I can claim is Head of Household.
I calculated, and had I claimed a 1 all year long the total amount of taxes I would have paid was $13,440. However, because I varied my tax allowance, the amount I’ll end up paying by year-end is $8362.
Will I see any relief, or will I owe thousands? What can I do in these final months to catch a break?
Just FYI – my end of year gross pay should be around $75k.
Hi Susan,
I suggest possibly updating your W4 for the remainder of the year by claiming zero allowances. This will allow the maximum amount to be withheld from each of your remaining paychecks. Also take note that you can set up a payment agreement with the IRS so that you are not expected to pay the amount that you owe in full.
Thank you – will do!
Hi I recently claimed 3 allowances and was single when I did that (May 2014). I still have it as 3 allowances, but just got married. We both have full time jobs. What should I change it to now? 2?
Hi Kara,
I suggest claiming one allowance.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
I also suggest taking a look at the IRS Withholding Calculator. It only takes a few minutes to complete and will give you the most accurate amount of allowances to claim in order to reach that break-even point at the end of the tax year.
I am the head of household. My wife and I file jointly, and she has an income. We have 2 small children, for which we spend monthly funds on child care. We are expecting twins in December this year as well.
1) Should my wife and i claim the same allowances on our individual W-2s?
2) How many allowances should we each be claiming for this year? And next year?
thanks!
Hi Smitty,
It is generally more beneficial for the spouse with the higher income to claim more allowances.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
I also suggest taking a look at the IRS Withholding Calculator. It only takes a few minutes to complete and will give you the most accurate amount of allowances to claim in order to reach that break-even point at the end of the tax year.