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!
Thanks for all of the advice above. I am recently married and my wife and I are both teachers with no kids. When single I claimed 2 allowances. We are planning to file separately for 2015 since we got married in May. 2 questions:
1. Should we file separately for 2015 or as married?
2. For the 2016 W-4 if we plan to file jointly and each have one main job should we each do 1 allowance? 2? I would rather get a bigger refund at the end of the year.
Thanks!
Hi Mike,
First off, congratulations on the wedding!
When it comes to your W-4 form, the more allowances you claim, the less is withheld from your paychecks and the more you will receive in each of your paychecks. claiming high allowances will also usually result in less of a refund (or more tax due to the IRS). The less allowances you claim, the more will be withheld from your paychecks and the higher your refund will be after filing for the year. If you prefer to have a higher refund opposed to seeing more take-home pay throughout the year, then you should each claim one allowance.
Also, keep in mind that unless you are under certain circumstances (ie: your spouse owes alimony/child support from a previous relationship, etc…), filing a joint tax return will generally result in being the most financially beneficial.
My wife and I both work and we have one child. Our paychecks are very similar in size. We want to maximize our take home pay without owing taxes in April. What should we claim for allowances?
Hi Bill,
When it comes to claiming allowances on your W-4 form, it is typically most beneficial for the spouse earning the higher income to claim the majority. In your case, it would be best for you each to claim one allowance for yourself. Then, one of you should claim an additional allowance for your dependent child. Since you are both earning about the same amount of income, it will not matter too much which one of you decides to claim this additional allowance. Just keep in mind that the spouse who does claim the additional allowance will receive more than the other spouse in their paycheck since less will be withheld for taxes owed to the IRS.
Hi,
I am married and my wife was on dependent Visa (H4) with me for 4 months and then she returned back to India, now my employer asked to fill out the W4 form (as new year starts). My wife is not going to be back soon in USA. What allowances I should go for 1 or 2?
Hi Mithilesh,
Based on the information you have provided above, claiming one allowance on your W-4 form would be best. Keep in mind that you can update your W-4 form whenever it is necessary to reflect your tax situation. Your withholding information will be updated for the following pay period.
Hello,
I recently got married.My wife works in different state and she is claiming zero and I claim 2, with married option. We are planning to file separately, should I claim her in my payroll with-holding 2 to avoid more taxes later when we file?
Thanks.
Hi Kinjal,
Congratulations on getting married!
Based on your situation explained above, you should stick with claiming two allowances. Keep in mind that your wife is claiming zero allowances on her W-4 which means that the maximum amount allowed is being withheld from her paychecks to cover taxes that she is liable for. The more allowances you claim, the less is withheld from your paychecks throughout the year (in turn, resulting in owing the IRS after filing your taxes). The less allowances you claim on your W-4, the more is withheld from your paychecks throughout the year. A refund is issued when too much is withheld.
You should also know that it is common, in your situation, to file a joint federal tax return with your spouse and separate state tax returns. This may benefit you more financially.
Hello I urgently need your advice. I’m currently staying in the US alone, my wife is not working but has a valid TIN number. My wife was with me in US during previous financial year and I had claimed the number of allowances as 2. Should I continue claiming 2 allowances since I’m married and wife is not working by providing her TIN number and filing taxes jointly?
Hi Venkatesan,
You can continue to claim two allowances on your W-4 form. However, you will not be able to claim your spouse as a dependent. You can file your taxes with a filing status of ‘married filing joint’. For more in-depth instructions, please take a look at an IRS website page here that will explain even more.