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, I am a recent college graduate, but still a dependent that lives with my parents. I was just offered a full time job so on my W-4 can I claim one allowance on line 5, or no? Also, what do I list on line 7?
Hi Beck,
Congratulations on graduating!
To answer your first question, I just want to make sure that you know that the W-4 Personal Allowance Worksheet (the middle section of your W-4) is solely for your own personal use. It is only there to assist you in figuring out how many allowances you would like to claim. Now, having said that, the amount that you enter on line 5 is the only amount that your employer will refer to. This is allow your employer to withhold the maximum, minimum or somewhere in the middle from each of your paychecks. The lower the amount you claim, the higher the amount that will be withheld (and vice versa). Being that you are going to be claimed as a dependent, I suggest that you claim zero on line 5 of your W-4. This will ensure that the maximum amount is withheld from each paycheck and that you will most likely receive a refund from the IRS when filing.
On to your second question – if you fit BOTH of the bullet points listed next to line 7, then you CAN claim EXEMPT.
Hello,
Need some help on the how should my husband and I should fill out our W-4…
I make the higher amount of money per year, so I assume, I am “head of household…?”
We have a daughter…. we want to maximize the amount of money we receive throughout the year, making our refund not as substantial… Should I claim “3” and my husband claim “O” Allowances? Thanks for your help.
Hi Katie,
Filling out a W-4 Form can seem overwhelming- especially because it determines how large your paychecks and tax refund (or tax due) will be. You mentioned claiming 3 and your husband claiming 0. Yes, you can do that. The number between the two of you should equal 3. With that said, you could instead claim 1 and your husband would claim 2. If you did this, you would have less tax withheld from your own pay.
Does that help? If not, feel free to send any further questions you may have!
I am single and currently pregnant due in May. As of right now I am claiming 1 which is myself, but I want to know if I should be claiming more and should I be claiming head of household since I stay alone and noone else can claim me? I am concerned with making sure they take out enough, but I also want to make sure I get a refund as well as making sure I am taking the max amount home from my paycheck.
Hi Kiara,
I suggest claiming zero or one on your W-4 form 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 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 recently married in 2014. My husband and I filed separately for 2014. My W-4 is currently single with zero allowances. I don’t mind a lesser paycheck, I just do not want to have to pay at tax time. So far I still get the same refund from federal but this is the first time I have ever had to pay State, and I have to pay about as much as I would have received in a refund in the past. Did I do something wrong on my W-4 or could it be the changes my state (NC) made for the 2014 tax year? I just want to determine the best and correct route for us.
Hi Stephanie,
It is typically most beneficial to file a joint return when married. I suggest updating your information as soon as possible with your employer and the IRS. Your filing status should no longer be single.
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 claiming a retired widiw parent on my tax returns. I placed 1 allowance on my w4. I file head if household.