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 am doing an internship from January 2016 to April 2016, was wondering if I should put “0” or “1” if I do not want a lot of taxes taken out?
Also, should I put “exempt” on my W-4 with my current condition?
Hi Eli,
Congratulations on the new internship! The higher amount of allowances you claim, the less is withheld from your paycheck each pay period. While claiming zero allowances generally results in a refund from the IRS, you will have the maximum amount allowable withheld from your paychecks for taxes (meaning less take-home pay). Based on your preference for having more income in your paychecks, it would benefit you more to claim one allowance on your W-4.
When it comes to claiming EXEMPT on your W-4, you want to be careful and make sure you are eligible otherwise you could owe the IRS. Take a look at our other article all about claiming exempt on your W-4 HERE.
I am married with 4 kids. I have been claiming married claiming one all past years. This year two of my high school kids got jobs (paying min. wage-15 hours a week). they started their jobs the end of the year (Nov.). I usually file jointly-and I itemize because of the house, schools, property tax, and others. This year, I do not have tuition, medical, very little house interest. :
1. what should my kids claim on their W4
2. how should I file this year so I get the most of my money I paid in taxes back?(long form? short form? should I claim my kids?)
I need to show that my kids pay taxes and independent for their college financial aid next year.
Hi Sam,
Since you’ve been claiming one allowance on your W-4, I’m sure you’ve grown accustomed to a fairly significant refund after filing your taxes. Assuming that your children still meet the requirements for you to claim them on your tax return, you can still claim them as dependents. Keep in mind that even if they file a tax return to report income earned, only one personal exemption can be claimed. This means that either you or your child will be able to claim the personal exemption for themselves. Make sure both you and they are aware of this to avoid IRS rejection and having to go through the amendment process.
So that they do not end up owing the IRS, your children may want to claim zero allowances on their W-4 form. This means that the maximum amount of income allowed will be withheld from their paychecks. Not to worry though. If more than enough is withheld, they will be issued a refund from the IRS.
When it comes to your own tax return, you will be issued a higher refund if you claim your children as dependents (just as mentioned above, make sure they aren’t claiming the personal exemption as well).
I am married and a mother of 2 children. We own a house and pay child care. I have been claiming Married and 3 and my husband has claimed single and 0. Are we doing this right? We get around 3000.00 back each year which is great but we talk to other people and they are getting close to 9k or more back. I know everyone’s situation is different. Thank you so much for the advice.
Hi Lynette,
When a married couple who is filing a joint tax return completed their W-4 forms, it tends to be best for the spouse earning the higher income to claim the majority of allowances. If you are earning a higher income than your husband, than you already have the right idea.
Also, although each tax situation is unique, you may be eligible for the childcare tax credit based on what you have mentioned above. You may also be eligible for numerous other credits and deductions that you are missing out on solely because you are unaware that they exist. I suggest giving our tax pros a call and see if they can help you out with a little bit more of an insight into your tax situation. Don’t worry! Our support is free for you to take advantage of. It could be that your friends are just claiming zero allowances between both spouses which means that their take-home income is a bit lower. However, it is best to see what kind of credits and deductions you could be reporting.
I am single with 1 child/dependent and have been filing as head of household during tax time. However when I had my child I never updated my employment w4 for and I’ve always left it as S-0…I’ve been OK with what I’m netting every payday under S-0 though. I prefer as large a refund as possible on tax time. Should I leave my w4 as is (S-0) or updating it would be better, if so to which one? S-1-2 or 3+? Thank you very much!
Hi Gina,
Claiming zero allowances means that you are allowing your employer to withhold the maximum amount of income from your paychecks throughout the year. The lower your allowances are, the higher your refund will be. Based on what you have stated above, you would prefer a higher refund over more take-home pay in each paycheck. If this is the case, then continue to claim zero allowances. If you would like to see more in your paychecks, I suggest claiming one or two allowances on your W-4. You can update your W-4 whenever you see it as necessary. If you update your allowances and feel that too little is being withheld for taxes, you can update your allowances.
I do not work and We have no kids and my husband always wants to put one allowance for him and 0 for me when filing. I always tell him to just put 0 allowances for both of us and file Married but withhold at a higher single rate.
This year we put 0 for both he and I and filed just Married. What is the difference between Married and Married but withhold at a higher single rate?
Won’t they take out a little less of your paycheck if you file Married as opposed to Married but withhold at a higher single rate? Thanks.
Hi Linda,
That is correct. Your husband will have more withheld from his paychecks if he claims ‘Married but withhold at a higher single rate’ on his W-4 form as opposed to just ‘Married’. Keep in mind that he is also having the maximum withheld from his paychecks by claiming zero allowances. This typically results in a high refund.