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!
Hello,
My fiance is currently the only one working. We have one child. How would he fill out his W-4 form?
We think he is suppose to claim 2 but when we finished the number at the bottom was 7. It seems they aren’t taking out enough taxes. We aren’t sure what we did wrong.
Any help would be appreciated.
Thank you in advanced.
Hi Lauren,
Completing a W-4 form can seem a bit tricky at first, especially with the IRS jargon used throughout. The first thing to know is that the worksheet provided at the top of the page is for your own records and, if followed to the tee, will provide you with the highest amount of allowances you can claim on your W-4. This doesn’t mean the amount that will get you the highest refund or even to help you break even. In other words, if you follow the worksheet, you will probably owe the IRS after filing. With your situation in mind, you were correct with thinking he should be claiming two allowances. The lower the number of allowances, the more taxes are withheld each paycheck. If you were to claim seven allowances, you would have very little withheld to cover any tax due.
I work and my husband works. We have 3 children. We want the most taxes to come out of our pay check what do we put as our allowances?
Hi Lisa,
To have the maximum amount of taxes withheld throughout the year from each paycheck, you should both claim zero on your W-4 forms.
My husband and I have one child. He is in the army, but getting out soon. He already has a job lined up and starts May 1st of 2015. So when we file we will have the army income and his new income. I am currently looking for work. What do you suggest we claim. I do not care about getting a refund at the end of the year, I would rather get all my money during the year. I know last year we claimed 6 and got a very small refund. What should he claim on his new job? and if I do get a job what should I claim? Thank you!
Hi Crystal,
Congratulations to your husband on his new job and our appreciation for his time spent serving!
With one child and a spouse, he may want to claim three allowances. If you then are offered a job, I suggest claiming one allowance and your husband lowering his allowances to two or simply keeping them the same. This should allow for an adequate amount of taxes to be withheld throughout the year while also still possibly receiving a refund.
I am 50 years old, divorced, head of household, have one child. I have been self employed for many years and getting a K-1. I inherited losses from my father when he died in the form of an NOL Carryback. I have over $350,000 and 6 years on it. I am starting a new job and need to fill out a W4 and need to bring home as much as possible out of my paycheck. I do not care about getting a refund. I do not have to pay taxes anyway with the NOL Carryback. How do I fill out the W4? Is there a limit on how many deductions I can take? My brother-in-law has his set up where he pays only FICA and Employer Withholding. I am going to work for a big company. It is not like I can sit down with the accountant.
Hi Loye,
Since there is technically no longer a requirement stated by the IRS, you can claim as many allowances as you see fit. It is highly recommended that you do not claim higher than 10 allowances. Keep in mind that the IRS does have the right to contact you or your employer to decrease the amount of allowances you are having withheld. I suggest checking out the IRS website page which explains possible circumstances.
I am married. Both of us full time jobs. Tax Bracket increased to >$151,000 earnings together for 2014 and I anticipate it will be a tad bit higher for 2015. (I just got a raise) I’ve claimed Single & 2 for many years and have always received a refund. At times too big of a refund. This year it was $2000.
I have 2 kids. Spouse has 0 kids. Should I continue to claim that way? Or maybe change to single & 1? I’m afraid I will start owing the IRS money instead of getting a refund. I’m interested in having money available to me throughout the year but certainly don’t want to owe any. It doesn’t matter if I get a refund so long as I don’t owe.
Hi Jessie,
Congratulations on the raise!
Since you are married, you may want to claim more allowances and instead of checking the ‘single’ filing status, check ‘married, but withhold at higher single rate’. This will allow you to see more in each paycheck while still withholding enough taxes from your pay as well. I would consider updating your allowances to claim three.
Also, definitely look into claiming the child tax credit. If you meet the requirements to claim this, your tax due will be reduced.