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!
Hi i was wondering what I should file for my allowances. I am a single mother of 1 child and work full time and school full time student.
Hi Kim,
Seeing as you are single with one dependent, I suggest claiming two allowances; one for yourself and one for your dependent. If you qualify for the head of household filing status than you can claim an additional allowance for that.
Hello,
It sounds like I should claim 2 on Federal and State. I’m married with no children. My wife and I both work. I am currently doing 1.
-Rob
Hi Rob,
Your state will automatically have you claim one allowance unless it is income-tax-free. For federal allowances on your W-4 form, a good rule of thumb to follow is claim one allowance for yourself and an additional allowance for each dependent you plan to claim on your tax return.
My husband and I both work full time. I claim 0 he claims 1. We have one child. I’m just curious if we’re going about this correctly. We live comfortably with our paychecks, we would like to maximize our tax returns. Together we probably make 35,000-40,000 a year. His income being roughly 25,000-30,000, and my income making up the rest. Should we both claim 0? Even though we will be claiming our daughter. Should we file jointly or separately?
Hi Krystle,
To maximize your tax refunds, I would advise that you both claim zero allowances and file a joint tax return. This allows the most to be withheld from your paychecks to cover taxes owed. In a lot of cases where taxpayers report zero allowances, more taxes will be withheld than necessary so a refund will be issued from the IRS. Your W-4 does not need to exactly match your tax return. You can still claim your daughter as a dependent come tax time.
Just recently got a new job. I’m married with one child so should my federal status be Married and federal exemptions 1 or 3
Hi Henry,
Congrats on the new job!
I suggest you claim one allowance for yourself. In addition to that, it will depend who plans on claiming your child as a dependent. It is typically most beneficial for the spouse earning the higher income to claim an additional allowance for each dependent. The other spouse can stick with claiming the one allowance for themselves.
I am married. My wife and I work and we want to file jointly. My wife earns more than I do. We have 3 children that we want to claim as dependents. We want to have more take home on paychecks, and don’t mind not having much when we file taxes (as long as we don’t owe). Is it better for us to split the 3 dependents on our W2, or only one of us should claim all 3. Thanks.
Hi Michael,
Since your wife earns a higher income, it will be most financially beneficial for her to claim the majority of the allowances on her W-4 form for the dependents that you plan to claim on your joint tax return for the year.