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 single with one job, I didn’t file head of household and I don’t have any dependents. should I put 0,1,2? and what would each number mean as far as getting money back. which option is the best?
Hi Sarah,
I suggest claiming one allowance as single with one job.
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 am single and claimed zero with one job but work alot at 1 job and get very little back but i dont want so much taken out every check i get. I do want a refund at years end but i dont care if its a small refund, i do need a bigger check though. If I claim 1, will I get a bigger check and a refund?
Hi Al,
Yes, I suggest claiming one to anyone who is single with one job. This will allow for a larger paycheck and a refund at the end of the tax year.
Help, please. My husband has argued with me for over 10 years that it is always the best practice for him to put all zeros on his w-4. We file jointly and have one dependent. I make more money than him and my w-4 is set up as 3 (married, one dependent). Most years, I am the only one working, but he just started a job and gets paid once a month. His first check just came in and wow there is a huge amount kept out. His w-4, as mentioned, is all zeroes.
I really wish he would stop this nonsense of putting all zeroes on his w-4. He says it helps to ensure that he doesn’t have to pay in at the end of the year and that it acts as kind of like a savings account. He insists he gets the grand majority of the withholdings back when we file taxes. I, however, file our taxes each year. And I must say, this does not seem to be the case. Most of the withheld money is not given back to him. Am I right in asking him to fill it out “correctly? (I’m asking this strictly on the tax level, not trying to win a he said/she said argument or anything) I would love to know what the opinion/advise of a tax professional is on this decade-long debate. lol. I truly hope you respond. Thanks!
Hi Rachel,
I see where your husband is coming from by claiming zero so that he will be guaranteed a refund at the end of the tax year since this has always occurred in the past. Many people think the exact same thoughts. However, let him know that it does not act as a savings account OR guarantee a refund to everyone and I’ll explain why. For starters, a savings account will collect interest over time whereas the IRS withholding taxes from your paycheck will not. In fact, a good amount of the withheld income is not refunded back. Also, although this tactic has guaranteed your husband a refund in the past, there is always the chance that he will owe money, even if it is a small amount. If he gets stuck in this situation, he will have had the maximum amount of money withheld from each paycheck as well as be faced with the fact that he owes the IRS now too.
My suggestion is, that since you are the steady income-earner of the household, that you claim the majority of allowances on your W4. This is typically the most financially beneficial to couples filing jointly. I also suggest that your husband claim one allowance on his W4. This will allow him to see a bit more out of each paycheck while still being able to see a refund at the end of the tax year; even if it is smaller than usual.
He’ll thank you later!
HI. I claim HOH with one child (2 allowances) but I got married July 27, 2014 and am just now getting around to changing this information with my employer. My husband used to file Single. Do I change mine to Married with spouse working and increase my allowances to 3 and he increase to 2 or will that be enough to prevent us from owing?I’d like to get a refund even if a small one.
Hi Fancy,
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.
Help! I just started a new job and i don’t remember this W4 being so hard! I am married, both of us work, and I have three children. But when I start to do the PERSONAL ALLOWANCES WORKSHEET portion of the W4 I get stuck at this point (see below). When I do these goofy instructions it makes my number in G: 6 and H: 9 since I have A: 1, B: 1, C: 0, D: 3, E: 1. Why does this seem wrong and such a high number? HELP please so I don’t get screwed in April and have to pay.
(G Child Tax Credit (including additional child tax credit). See Pub. 972, Child Tax Credit, for more information.
• If your total income will be less than $65,000 ($95,000 if married), enter “2” for each eligible child; then less “1” if you
have three to six eligible children or less “2” if you have seven or more eligible children.
• If your total income will be between $65,000 and $84,000 ($95,000 and $119,000 if married), enter “1” for each eligible child.
Hi Brian,
When completing the W4 Form, you are calculating the maximum amount of personal allowances you can claim. However, you can always claim less allowances so that you do not owe when you file at the end of the tax year. Since you and your spouse both work, you can either split allowances or the spouse with the higher income claim the majority of the allowances on their W4. The latter tends to be more financially beneficial to the couple. I suggest claiming no more than five allowances between the two of you.
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.