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. Recently, I became a resident alien. I live in Arkansas. I am updating my info at work and need to fill out new Form W-4 and Form AR4EC. I am married to a U.S. citizen. My wife also works. On the above mentioned forms should I Claim myself or Claim myself and my spouse (should I put “1” or “2”) in exemptions? As for now, I just claimed myself (“1”). We are planning on filing a joint tax return for 2015. Can we still do that if I only Claimed myself on Exemptions? Should I Claim us both on exemptions? Does it have any effect on anything?
Hi Alex,
When it comes to withholdings, resident aliens are treated as U.S. citizens. When completing your W-4, keep in mind that your spouse also is. You’ll only need to claim an allowance for yourself since your wife will be able to claim herself on a W-4 form. You can file a joint tax return with separate tax returns as long as you report ‘married’ on your W-4 as well.
That being said, it is important to know that your W-4 gives you a bit of leeway to choose how you pay taxes to the IRS. If you claim a high amount of allowances, then you will see more money in each paycheck but you may owe the IRS after filing your taxes since less was withheld throughout the year. On the other hand, if you have less allowances (or zero) withheld, then more money will be withheld from your paychecks. This will typically result in a refund after filing your taxes. Whichever you choose to do, there is no direct penalty from the IRS. The W-4 just controls how much or how little is withheld to cover taxes owed to the IRS.
Hi
I am married. Both are working full time. I am having trouble figuring out how to fill out W4. We are filling separetly. Do we claim one allowance each? And mark “married but withhold at a higher rate”? I dont want to end up paying the IRS come income tax filling.
Hi Mon,
Completing your W-4 form with a status of ‘married but withhold at higher single rate’ means that your employer will have more taxes withheld from your paychecks than if you were to just choose ‘married’ on your W-4. This should ensure that you will either be issued a refund from the IRS or that you will owe less to the IRS after filing. Seeing as you do not want to owe the IRS at all, I would advise that you each claim one allowance and ‘married but withhold at higher single rate’. Keep in mind that if you believe this limits your income too much, you can always update your W-4 form and have it effective for the following pay period.
It is also important to keep in mind that married couples will typically reap the most benefits, financially, when filing a joint tax return. If possible for you and your spouse, I would highly suggest doing that over filing separate tax returns.
I am retiring at the end of the year and I am trying to complete the W-4P form. I am married and we file separately and I have always claimed 0 allowances. My question is, do I have to complete the “Multiple Pension/More-Than-One-Income Worksheet” declaring his pension since he is retired? I don’t think I have to because the form states, “or you have a pension and your spouse works.”
Thank you!
Hi Sammy,
Congratulations on the retirement!
You would need to complete the Multiple Pensions/More-Than-One-Income Worksheet ONLY if ‘you are married and you and your spouse both have income subject to withholding and your combined income from all sources exceeds $20,000‘. This will allow you to avoid having too little tax withheld to cover what is owed to the IRS. If this situation does not apply to you and your spouse then you can skip the second page of the W-4P form altogether.
My name is Rakia, I’m a full time student and my mom still claim me on her taxes. I’ve recently got a job but I don’t want taxes taken out of it. Do I file for zero, 1, 2 or 3 because federal take loads of money out, along with the others.
Hi Rakia,
I would advise that you claim one allowance on your W-4 form. Also, depending on the income you earn, you may not even have much withheld. Keep in mind that you can update your W-4 form as you see necessary throughout your employment.
Hello,
I recently started a new job and I can never understand how to fill out the W4 form. Last year I had to pay IRS because I did not fill out properly the W4 form. I am single and I have one child. Should I claim 2 on the form? As well as filling out the Child Tax Credit? I will be making 16K annually. I am not sure what to do and I just do not want to make the same error as before.
Hi Emeli,
Congratulations on the new job!
The W-4 form is intimidating to many people but always keep in mind that you can adjust it whenever you see necessary. A basic rule to follow when completing the W-4 is to claim one allowance for yourself and an additional allowance for each dependent you will claim. Based on your situation described above, claiming two allowances would be most beneficial to you.
To qualify for the child tax credit, you must meet ALL of the following requirements:
1. The child being claimed must be under 16 years old.
2. The child must be a United States citizen, a United States national, or a resident alien.
3. The child must be claimed as a dependent on your tax return.
4. The child must be related to you in one of the following ways: son, daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, grandchild, niece, or nephew.
5. The child must have lived with you for more than half of the year (stayed with you for at least 183 nights).
6. The child must NOT have provided more than half of his or her own financial support for the year.
Thank you for your help!
What exactly is the child tax credit? I do qualify for it based on the requirements. Am I required to fill it out?