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 have a daughter but me and her mom are not together. I work and I want to claim my daughter. My daughter does not leave with me but i do provide food and money. My question is can I claim my daughter on my taxes? and put 2 on my w4?
Hi Nepthalie,
When it comes to claiming a dependent, you must meet ALL of the IRS requirements listed on the website. One of these requirements is that the dependent have the same primary residence as the taxpayer claiming him or her. Based on the information you have provided above, you would not be able to claim your daughter. One exception would be a court order stating otherwise.
That being said, you can claim 2 allowances on your W-4 form. Just keep in mind that this will allow you to have more money per paycheck but may result in you owing taxes to the IRS after filing for the year.
I am single with no kids and on my paycheck it says federal: 3 and state: 1
what does that mean?
Hi Gloria,
That simply means that you have claimed three allowances on your W-4 form and that you are having taxes withheld from an income tax state. If you believe that the information you see on your paycheck is incorrect, you can update your W-4 form with your employer. In the tax situation you described briefly above, you may want to claim one allowance to ensure that enough federal taxes are being withheld from your paychecks to cover the taxes you owe to the IRS. Otherwise, you may have a tax due amount after filing for the year.
Hello,
I am single. I work a decent job. Not rich or making 50,000 a year. I claimed 0 on my tax witholdings for my paycheck. I would like to receive a refund when tax season rolls around in January. Am I doing the right thing
Hi Cec,
That is correct. Claiming zero allowances allows for the maximum amount to be withheld from your paychecks throughout the year. With your tax situation briefly described above, you will most likely end up with a refund issued by the IRS after filing your tax return.
I’m an 18 year old student and just got my first job. My parents are telling me that I am exempt, however I’m not so sure. My parents claim me as a dependent on their joint tax return. In the personal allowances worksheet, I claimed one allowance as I am single and will only have this one job, so wouldn’t that me not exempt? And if I wasn’t exempt, should I be claiming one allowance?
Thanks in advance!
Hi Casey,
According to the IRS rules stated on the W-4 form:
“If another person can claim you as a dependent on his or her tax return, you cannot claim exemption from withholding if your income exceeds $1,050 and includes more than $350 of unearned income.”
The IRS tends to explain the rules and guidelines in a confusing manner sometimes. So, to restate the above; if your parents are claiming you as a dependent on their tax return and you are earning more than $1,050 at your first job throughout the financial year, then you cannot claim exempt. However, there are exceptions that you should take a look at above the Personal Allowances Worksheet on the W-4 form.
I am self employeed who receives 1099’s and my husband is starting a job where he will receive a w2. We have two children and pay a decent amount per year for child care since they are still babies. I make double what my husband brings home and make quarterly tax payments. Should my husband claim 0 allowances to try and balance out some of what I owe so I can do smaller quarterlies and pay less at the end of the year?
Hi Molly,
Although you haven’t specifically mentioned above, I can assume that your husband is claiming at least two allowances right now on his W-4 (maybe even more). By decreasing that to zero allowances, he will have more of his income withheld per pay period and will increase the refund amount he receives (or lessen the tax due to the IRS) after filing. That being said, it won’t directly lessen your burden but your husband will have a higher refund come tax time to possibly cover the amount that you will owe to the IRS.