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!
Hi,
Today I went online to check on all the tax stuff and noticed in my allowences was changed from 4 to 6. I have 3 dependants plus myself. Im assuming one of my kids was messing around on my phone and changed the number. My pay went up by about 100 dollars a period about 3 months ago. So I think thats around when. How will this affect my taxes? Will I owe? I changed it back to 4 for this year.
Jeff
Hi Jeff,
Since it was only for a three month period, it won’t have too much of an effect on your refund amount/amount owed when filing.
Thank you for this! Very informative.
Question: Married, filing jointly, one kid, 6,000 in daycare expenses a year. What should the wife and I claim? I was thinking, 2 and 1? Sound right? We we’re both claiming 0.
Hi Robert,
That is correct. Also I would suggest that the spouse with the higher income claim the majority of allowances that you choose.
Hi. I am trying to fill out my W4 form, and am coming up with 7 allowances?? That seems like too much to me. I am single, head of household, and have one child. The allowances are 1 to claim myself, 1 for being single and only having one job, 1 for my child, 1 for head of household, 1 because I will have at least $2000 in child care expenses, and 2 under the Child Tax Credit. Will I end up owing a huge amount at the end of the year if I claim 7? Should I claim less?
Hi Halie,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should 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 withheld. If you claim a larger amount, you’ll have less withheld. 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.
In order to do 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.
hello! I am single, head of household (own a condo), no dependents. I don’t want to owe taxes, the work sheet has me claiming 3, is this appropriate?
Hi Teresa,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should 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 withheld. If you claim a larger amount, you’ll have less withheld. 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.
Hello Tax Advisor,
I currnently file single. My girlfriend (doesnt work) and her child (age 5) having been living with me for about 6 months. I currently claim 0 on my w4 and they take quite a bit from me bi-weekly. Can i legally claim my girlfriend and her child? If so, what should I claim. I am not so worried about a huge refund, I also dont want to owe either.
Hi C.L.,
The number you put on your W-4 is only an estimate for what will be withheld from each of your paychecks throughout the year. This amount can be as high or low as you prefer. However, when it comes to claiming dependents on your tax return, you need to meet the requirements for claiming someone as your dependent. These guidelines are available on the IRS website.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should 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 withheld. If you claim a larger amount, you’ll have less withheld. 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.
In order to do 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.