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 single with no dependents have one job full time . started working in DEC 2014 and received low tax refund for this year.. what should i do to increase it . how many allowances should i claim?
Hi Maryam,
To increase the amount withheld from each paycheck (and increase your refund as well), you should claim a smaller amount on your W-4 than you are currently. For example, if you were claiming one, then if you update that amount to be zero, you will receive a larger refund.
Married and have two part time jobs, and a working spouse with one full time! How many allowances should we claim on each W4 of us? One of my jobs didn`t withhold any Fed. tax last year and now I f`ve found out I owe IRS money! I need your advice!
Regards!
Hi Zak,
The best way to make sure that you do not owe the IRS (at least a hefty amount) is to claim a smaller amount of allowances. For example, if you were claiming one allowance on each of your W-4s, consider lowering that amount to zero. By lowering the amount of allowances, the amount withheld will be greater but you won’t be surprised with a hefty amount to pay come tax time.
Also, keep in mind that if you do not earn over a certain amount per job, the government will not withhold from that place of employment.
Single, and One job – per your recommendation I should claim 1. I have been claiming 2 for a while now, and my 2014 (and other returns) have shown an average of even taxes or owing less than $10.. should I continue to claim 2 or change it to 1?
Also, I did the IRS estimator, but the recommendations were unclear (Filing Status: single, I job).
• For the only job you entered (which has a projected salary of $X): 1 allowance.
• Check the “Single” box on your Form W-4
Tip Be sure to review your withholding at the beginning of 2016 (or any time there is a change in your tax situation). If you follow the above recommendation and do not check your withholding at the beginning of next year, your withholding for 2016 might be incorrect.
Please, can you explain the results above? Thanks!
Hi Rush,
The Withholding Calculator tool suggests that you claim one allowance and a single status. You can continue to claim two allowances. This will just give you a smaller refund amount.
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, will file head of household. I have 1 child, and I take care of my mother as well who recently moved in with me. I make less than 30,000.00 a year. I would hate to pay taxes back at the end of the year. But I wouldd like the option to invest my money however I choose during the year. Which would mean a lesser amount withheld during the year.
How many allowances should I claim?
Hi Lilia,
I do not suggest claiming seven as you are increasing the chance of owing money back after filing. I suggest claiming no more than three allowances.
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.
One of our employees is getting married next month and would like to have extra money in his next 2 paychecks. I told him that this situation does not make him exempt status. How many dependents can he claim for his next 2 paychecks in order to get him the most in his take home pay? He does realize his tax responsibilities will still be the same for 2015.
Hi Mike,
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.
With that said, you can update your W-4 at any point and claim the maximum amount of allowances so that no taxes are withheld from your paycheck. I suggest reminding your employee to update his W-4 to the maximum amount of allowances being claimed for only a short period of time so that he won’t owe the IRS a substantial amount when he/she files.