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 parent and started working on june 15 I ONLY HAVE ONE ALLOWANCE i did the IRS WITHHOLDING CALCULATR ABASED ON MY INCOME AND THE FACT THAT I STARTED IN JUNE THE CALCULATION WAS $0 FOR MY ANTICIPATED INCOME TAX WHAT SHOULD I DO??? SHOULD I ADD MORE ALLOWENCES SINCE MY TASX RETURN IS $0???
Hi Sam,
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, just got married in May and both my wife and I work. She is claiming married-0 exemptions. I am claiming single-1 exemptions. Our combine income is over $150000. Should we keep the exemptions the same?
Hi Curt,
I suggest that you each claim married with one allowance.
You can keep claiming as you are. Just keep note that you have a few options. If you both claim married, then the withholding amount from each paycheck will be less than at the single rate. Since your wife is claiming zero allowances, the maximum amount is being withheld from each of her 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.
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 married with one child. My wife and I file married separate. She claims 2 on her form what should I claim on my form. I am not looking for a easy way to get more money but to file correctly. Should I just claim 1 for myself and that’s it?
Or should I claim zero
This is W4 fo which I am not used to filling out. I usually see a W2.
Hi Scott,
I suggest claiming either zero or one allowance. Claiming either should leave you at a break-even point come 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.
Hi,
married, husband works full time, i work part time. 2 children by the end of 2014, so would qualify for 2 child tax credits (correct?).. witholding calculator said for my husband to claim 12 allowances and me to claim 0, and we would still receive a refund. makes no sense. Currently my husband is claiming 2 for CA and 0 for Federal… please help. having another baby soon and need to change. what would you suggest? thank you!
Hi Taylor,
Claiming twelve allowances does seem a bit high. I suggest claiming four allowances between you and your husband. Keep in mind that you can always claim less.
Hi,
I am married and have a kid but both of them are in India. I would expect to take them to be in US by January 2015. Please suggest the number of claims I should put. I earlier put the no of claims as 3 considering I would taken them to US by December 2014 but which is unlikely now. Please advice.
Thanks,
Girish
Hi Girish,
If you are only claiming yourself, then I suggest claiming one allowance. Once your spouse and child are in the United States, you can then claim them on your W4. Keep in mind that you can update your W4 at any point in time. You can claim one for yourself right now but you can update your W4 as soon as next pay period (or whenever your spouse and child come to the U.S.)and it will take effect.
Thanks for your reply. I have one more query about selection of Non resident alien and resident alien. I landed to US on July 1, 2014. So I guess I should select NRA and the marital status as single till i claim for myself. Once my family is here, I can change to RA. Pleas advice if I am wrong in understanding between RA and NRA.
Your reply is greatly appreciated.
Thanks,
Girish