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!
If 1 spouse is working 1 job only getting about $700 a month, 1 baby, and the other spouse is disabled… is it illegal to claim 0 or 1 even if the calculator says to claim 3?
Hi Shane,
Not at all,
You can always claim less than what the IRS Withholding Calculator or the W-4 instructions tell you.
Hello. I am a single mother with one dependent child… On my pay stub it says I am claiming 7 federal and state head of household 0. Is that correct? I’m not so concerned with the income tax refund at the end of the year I just don’t want to owe the IRS anything and I want a bigger paycheck. Please advise. …
Hi Alana,
I suggest claiming two allowances. You may want to speak with your pay roll department about updating your W-4 form. From what you have mentioned above, it sounds like you have claimed seven on your W-4 form.
Hi! I am so confused with the whole tax thing! I am head of household, single with one dependent child and currently pregnant with another who is due in February. What should I claim?
Hi Tay,
I suggest claiming two as of right now.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. By following the directions on the Personal Allowances Worksheet of your W-4, you will calculate the maximum amount that you can claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a larger 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.
Not sure if this is still open/giving advise but this page is awesome!
My wife and I both work and have one child who is in day care. We both claim 0 on federal and state. We have always enjoyed the large refund but things are getting tight what would you suggest? TIA!
Hi Mcginnin,
Thank you! Yes, blog comments are always welcome and encouraged!
I suggest your that you and your wife each claim one on your W-4 form. This will allow for a bit more in each paycheck. Also, if you’ve always had a large refund, then you will most likely still receive one (just a bit smaller when claiming one allowance each).
Good day. I am divorced and have two kids, however we have a 50/50 time-sharing court order, and I do pay child support as well. What should I be claiming to allow me to receive the max on my paycheck and avoid paying such a high tax bill? Thank you! 🙂
Hi Anthony,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. By following the directions on the Personal Allowances Worksheet of your W-4, you will calculate the maximum amount that you can claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a larger 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.