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 am single (divorced dad) and my 2 kids were placed with me full time in July, so I am eligible to file as head of household for the 2015 tax year. My W-4 withholding was filed with 2 allowances and I didn’t change that after the kids were placed in my custody. I also pay alimony. When I ran through the refund calculators online, I’m apparently looking at a pretty large refund for 2015 since I had more withheld than I would have if the kids had been with me full time at the beginning of the year.
I will be changing jobs probably within a month, so I’m just wondering how many allowances I should put on my W-4 when I start my new job – I’d like a decent sized refund in 2017, but since my hourly rate will actually drop a little, I’d like to boost my take home pay a bit.
Hi Jon,
When filling out your W-4 allowances, a good rule of thumb is to claim one allowance for yourself and an additional allowance for each dependent you will claim on your tax return come time to file. In your case, that would be three allowances. If you feel that you are still not getting enough out of your paychecks, you can claim an additional allowance for head of household status. Keep in mind that you can update your W-4 form as you see necessary. Your employer will need to put the changes into effect for the following pay period.
Hello, I am single and file my own taxes. I meet the requirements for ‘exempt’ under line 7 but still have one allowance (which is myself) in line 5. This is from line H above in the w-4.
My employer keeps shredding the document and saying I’m doing it wrong because I have to have lines 5 and 6 blank if I am claiming ‘exempt’ in line 7. Am I missing something here, because I still think I’m completing it correctly. Thanks
Hi Aaron,
The only part of the W-4 form that your employer needs is the bottom half of the first page. You’ll notice that the W-4 states to “Separate here and give Form W-4 to your employer. Keep the top part for your records.” That being said, your withheld amount will only be reflected by what is reported on Line 7; not what you have entered on the Personal Allowances Worksheet.
I would advise you to only submit the bottom half of the W-4 to your employer and tell him/her that you would prefer to keep the top half for your own records (as stated on the actual form).
Hi, I’m a student and duringthe summer I was working and on the form I filed 1 because I saw somewhere online I as a dependent I can put either 1 or 0
Later in the school year, after I left my summer job, I’mnow claiming 0
Is this okay? Can my mom still claim me?
Hi Alex,
Claiming allowances doesn’t interfere with someone claiming you as a dependent. As long as you qualify as a child dependent, your mom can claim you on her tax return. If taxes were withheld from your paychecks, you may want to file a tax return to claim that back as a refund. You can do that and have your mom still claim you as a dependent. Just be sure that you do not claim the personal exemption for yourself on your own return.
Hello,
I don t have any taxes taken out so now I need too. I make $34,000 yearly with a single, grown son who claims himself. How many allowances should I claim to break even or at least have enough taken out?
Hi Wander,
A good rule of thumb to follow when completing your W-4 is to claim one allowance for yourself and an additional allowance for each dependent you will be claiming on your tax return. In your case, I would advise you to claim one allowance. This will allow for enough to be taken out to cover tax owed to the IRS.
I’m a full time doctoral student and do not have a job in the traditional sense. Through my program I receive a scholarship and stipend (about $2000/month) and I’m required to do research related work for 10 hours per week as it relates to my dissertation. I don’t have another source of income and all of these funds go toward living expenses. Does this qualify me for exempt status or do I have to claim this money as regular income?
Thanks in advance for you help!!
Hi Dee,
It can get a bit tricky when it comes to taxing a scholarship and stipend. The first thing to keep in mind is that the rules are different for each one.
When it comes to a scholarship, the IRS states that it is ONLY tax-free if all of the following is true:
-it does not exceed your expenses,
-it is not designates for other purposes (such as room and board) and does not require that it cannot be used for qualified education expenses, AND
-it does not represent payment foe teaching, research or other services required as a condition for receiving the scholarship.
When it comes to a stipend, it will count as income and must be reported on a tax return if:
-you’re not enrolled in a degree program in a nationally accredited school
-you’re using any part of the amount received for non-course-related expenses (ie: room and board, laptops)
-you’re ‘earning’ any part of the amount received through a service you are providing (ie: via teaching or research)
If the scholarship and stipend you are receiving qualify as income to be reported, know that there are credits and deductions that you can look into. Feel free to take a look at the IRS website or contact our customer service team to help.