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 have two questions, I hope you guys don’t mind answering them for me…
1. I got married on September 30th but I didn’t change my tax information (0/1 allowance to 2) until a later date. Will my refund be negatively affected by the delay?
2. My coworkers and I have a signing bonus through our Union. Some of us (including myself) were hit hard by Uncle Sam which caused a high amount to be deducted for taxes. Even though I was told by some of my coworkers who weren’t effected to go exempt (which is why they’re good), I have some reservations about it since I heard that I can get the money back in my refund. We are also supposed to be getting another increase in the first check for 2016. My husband is a bit wary about me changing my W-4 but I’m just really confused.
Thanks again,
Antoinette
Hi Antoinette,
Congratulations on getting married! You won’t have to worry about your refund too much. Since you continued to claim 0 allowances on your W-4, that means that your employer was withholding the maximum amount of taxes allowed. If anything, your refund amount will be increased. However, be sure that your payroll department has updated your W-4 information to married and however many allowances you want to claim. You want to be sure they have done this so that you are able to take full advantage of your tax benefits for file a joint tax return.
When it comes to your bonus, you want to always check with your employer to see if it will be paid separate from your regular paycheck or if it will be combined with your regular pay on one check. This is important since it will determine how you should adjust your W-4. If your bonus is issued as a separate check, than your withholding amount is at a fixed rate and claiming exempt is the only change that will affect your pay. Be wary of claiming exempt though. Claiming exempt on your W-4 without being eligible to claim exempt on your tax return could result in too little being withheld for taxes owed (resulting in tax due). If your bonus is combined with your regular paycheck, consider your bonus to be part of your total income when deciding on how many allowances to claim. Remember that the more allowances you claim, the less will be withheld from your paychecks. The less allowances you claim, the more will be withheld from your paychecks.
Hi there!
I recently started a second job & need to fill out a new W4 for Multiple Earners. I am single, no dependents. What is the best way to figure out the allowances and amount withheld?
Hi Ashley,
Congratulations on your new job!
The first thing to keep in mind is that you ONLY need to complete the Two-Earners/Multiple Jobs Worksheet if you are directed to from Page 1 of your W-4 form under Line H. If you are directed to, it is still optional. Typically, a taxpayer who is single with two jobs will claim one allowance at their higher paying job and zero allowances at their lower paying job. If you do choose to complete the Multiple Jobs Worksheet, just follow the instructions listed on the form to complete lines 1-9. You will them enter the amount that you calculated for line 9 on line 6 of your W-4 on Page 1.
I am a single person nd live with my aunt put i give no care expense but me, do i put 0 in allowance?
Hi Yamelit,
You mentioned above that you are living with your aunt. Does this mean that she claims you as a dependent on her tax return? If so, then claiming zero allowances on your W-4 form will be the best choice. Do you claim her as a qualifying dependent relative? If this is true, then you may want to claim one allowance for yourself and an additional one for your aunt. If both of these are incorrect and you support yourself and cannot be claimed as a dependent on anyone else’s tax return, then you may want to claim one allowance on your W-4 form for yourself.
I currently claim 0 on my W4 Tax form but was suggested by my boyfriends accountant that I should claim more in order to receive more in paycheck. I have 2 kids as well but we are not married so I am single. We jointly own a home but I am the primary person. Should I be claiming head of household? What number should I be claiming?? I currently receive tax return in amount of around 7000. How will claiming more affect my returns? Thank you for the guidance.
Hi Kendra,
A standard rule to refer to when completing your W-4 is to claim one allowance for yourself and an additional allowance for each dependent that you plan to claim on your tax return. Keep in mind that your W-4 form is used solely as an estimate for how much you’re allowing your employer to withhold from your paychecks to cover taxes that you are responsible for. To be most beneficial to you, your W-4 form should reflect how you plan to complete your tax return as much as possible. Since you are claiming zero allowances right now, you are having the maximum amount withheld from your paychecks to cover taxes owed. This is why your refund tends to be high. If you claim a higher amount of allowances on your W-4, you will have less money withheld from your paychecks to cover taxes and your refund will decrease a bit in return.
Based on what you have stated in your comment above, it sounds like you may qualify for head of household status. You may want to claim an additional allowance for this filing status.
I am married and will be filing joint taxes with my husband. We have a 2 1/2 year old daughter and I checked off married but withdraw at single rate but claiming 2 allowances while he claims 0 and withdraw at single rate. Combined we just came up short of $50,000 for the year. What are the chances we’ll get a good refund?
Hi Anna,
Based on the information you have provided, it sounds as if you are working towards a decent federal refund. Married filing a joint tax return is ideal for tax benefits. Claiming zero allowances allows for the maximum to be withheld from your paychecks over the course of the year to cover taxes owed. This typically results in a refund issued by the IRS due to an excess amount of income being withheld. You may also want to look into the Child Tax Credit which will also directly decrease your tax liability.