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,
I am a 27-year-old. Did a paying internship from January 2015 through June 2015 (made $15,000 in that period) then another job (different state) starting August 2015 (salary is $70,000 yearly). So, 1 job, no kids, not married. I want to not owe any money at tax season, but I also want to save as much as I can to pay off student loans ($190,000) and save for a house. Do you recommend 0, 1, or 2 allowances?
Thanks in advance.
Hi Jamie,
I suggest claiming one allowance based on the information you have provided above. You can likely still expect a refund but have a bit less withheld throughout the year than if you claimed zero allowances.
Married, Head of Household, four kids, single income household, how many should I claim on my W-4? I typically claim 3 but then at the end of the year I lose out on money by paying too much in and not getting much back. Just trying to see what I should be doing.
Hi Wes,
Based on the information provided, you could be claiming more than three allowances and most likely still be issued a refund. This would allow you to see more take-home pay from each paycheck throughout the year with less of a refund. Keep in mind that you are not technically ‘losing out’ on money. The IRS will claim their money whether you spread it out over the year or choose to pay it all after filing in one lump sum.
I did the IRS calculator and it said that I should claim 15 allowances to get my withholding adjusted closer. I’m not sure what that meant as I am single with no kids and I entered as much. I on see a maximum of 3 in my situation. Is this correct?
Hi Myles,
I definitely suggest double checking and trying the calculator again. It is possible that you mis-entered information with that result. As single with no dependents and one source of income, it would be most beneficial for you, financially, to claim zero or one allowance. This ensures that enough taxes are withheld from your paychecks over the course of the financial year to cover the amount owed to the IRS. Claiming zero or one typically does result in being issued a refund after filing. On the other hand, claiming 15 allowances would mean that little to none of your income is being withheld from your paychecks, typically resulting in a large tax bill due after filing.
My wife recently got employed and on her W4 her status is listed as “married” and claiming zero. Her first paycheck stub is showing zero deducted for federal. This caused some concern for me and I just wanted to know if she filled in something incorrectly.
Hi Dunpeal,
The first thing that your wife should do is verify with her payroll department that her W-4 form is completed correctly. She may have accidentally claimed exempt on her W-4 form. If this is the case, she will want to update her W-4 as soon as possible so that the change will go into effect for her future pay periods. Another possibility for why no income tax is being withheld is that she is not earning more than the taxable wage base to have federal taxes withheld from her paycheck. She will be able to clarify this with her payroll department.
I AM SINGLE I FILE HEAD OF HOUSEHODL AND I HAVE 1 DEPENDENT CHILD THAT IS 2 YEARS OLD. I AM CONCERNED WITH RECEIVING THE MAXIMUM REFUND AS WELL AS THE MAXIMUM EARNED INCOME CREDIT. SHOULD I CLAIM 2 OR 3?
Hi Shari,
In order to maximize both your take-home pay throughout the year AND your refund amount, your most beneficial choice would be to claim two allowances on your W-4 form. Claiming three will allow you to have a bit more throughout the year but may end up causing you to owe the IRS come tax time is too little was withheld to cover what was owed to them.