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!
Hello,
I am married and my spouse and I have 1 child together. I file married and 2 allowances and my husband files married- 1 allowance. We ended up owing last year so should I change this to something else?
Hi Nichole,
What I suggest doing is having the spouse with the higher income claim the majority of the allowances. This generally seems to be the most beneficial so that you will get as close as possible to breaking even at the end of the tax year.
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 starting a wonderful new job after over a year long search. Very excited but wondering what I should claim? I am married, my wife does not work, I have a child and a step child both living in the house.
Hi Nick,
Congratulations on the new job!
When it comes to claiming allowances, you may first want to make sure that you can claim both children and your wife as dependents. Once you know this, I 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.
Once you know the maximum amount of allowances you can claim, you should know the jist of how allowances work. 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. You do not have to claim the maximum amount; you can always claim less.
Hello,
I’m married, both of us working. We have 2 kids, both go to daycare. We’ll make under $119,000 together. Should I claim a 6 on my W4? I’ve normally claimed a 3, but now with an additional child I’ve wondered about that? But I fear of owing at the end? Would I owe?
Thanks!
Hi Vladimir,
I 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 only one working and my girlfriend and my son live with me What do I have to check to claim myself and them both?
Hi Steve,
Assuming that your girlfriend is an eligible dependent, you can claim her and your son on line D of your W-4(if you are eligible for the child tax credit, you will claim your son on line G). You can claim yourself on line A.
As a second reference point, I 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.
Hi i was wondering, i was working at a job that i think automatically claimed me at 0 i was working there from the start of the year till about aug then i started my new job and they told me to claim 2 because i have my mom as a dependent cause i pay more then 50% of her bills but i dont want to end up paying taxes when it comes time. what should i claim so i dont have to pay but get a refund.
Hi Erik,
If you have been claiming zero for most of the tax year, then you should be okay with claiming two allowances. I do not suggest claiming more than that.
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.