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 married and we have 2 children. My wife is currently not working, but will be soon since she is recovering from labor. When it was just me working, I claimed 4. How many should I be claiming now? When I updated the W-4 worksheet, it seemed to me that I should have 7 for the exemptions, but not sure if this is correct. Can you provide any help on making sure I do this right?
Hi Christ,
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 instructions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim (Keep in mind that this worksheet will not be given to your employer or the IRS). 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.
Hi
I am married. my wife and I have full time job. We have been filling tax together.
We do not have kids. Our total anual income combined together is 1,20,000 USD.
for 2014 we have close to 4500 USD due federal and state tax because of lesser withholdings.
We are planning to update W4 for maximum deduction so that for fiscal year 2015 we will get tax returns in 2016.
Could you please suggest how much deduction we should mentioned in w4. both of us have to submit updated w4 to our employer ?
Thank you in advance.
Kind Regards,
Swapnil
Hi Swapnil,
I suggest that you each claim one on your W-4 forms.
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 instructions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim (Keep in mind that this worksheet will not be given to your employer or the IRS). 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.
I am single just got a job I have no kids Im a dependent for my dad but I dont know how to fill out a w-4 form please help asap need this done today
Hi Nova,
I suggest claiming zero.
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 instructions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim (Keep in mind that this worksheet will not be given to your employer or the IRS). 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.
hi im single with 4 kids..ill like to get a big refund back but cant afford for them to take alot of money out on my paycheck…what should it do?
Hi Syrup,
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 instructions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim (Keep in mind that this worksheet will not be given to your employer or the IRS). 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.
Recently divorced with two kids,and am working full-time. We have joint custody of the kids, but for tax purposes, the ex will claim one child, I’ll claim the other. I completed a W-4 as single head of household and came up with 5 allowances; the IRS online calculator suggested 4. I would prefer a smaller paycheck if I’m not hit with a tax bill
Hi Mark,
With your preference in mind, I suggest claiming less allowances for a smaller paycheck and higher refund amount.