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 single (divorced) and collect weekly alimony. What would you suggest me claiming 0 or 1?
Thank you!
Hi Lorie,
Alimony is considered taxable income by the IRS and should be reported as such on your tax return. Depending on the amount, it may place you into a higher tax bracket. You should base your allowances on this since you may owe more if your income is higher with the alimony payments. For now, I suggest claiming zero allowances to be safe. This means the maximum amount will be withheld from your income to cover taxes you owe. If too much is withheld, you will receive that amount back as a tax refund from the IRS after filing for the year.
I’m married, sole income earner at a gross pay of around 34,000/year. We have 1 child and no child care costs because my husband stays home. According to the w-4 worksheet I should claim 6 deductions. This seems excessive, and I’m scared I’ll end up owing a significant amount if I change my w-4 to reflect that many allowances. Here’s what I have according to the worksheet:
A.) enter 1 for yourself. +1
b.) enter 1 if you are married, have only 1 job and spouse does not work. +1
C.) enter 1 for your spouse +1
D.) enter number of dependents. +1
E.) enter 1 if head of household. +0
F.) enter 1 if you claim over $2,000 in childcare. +0
G.) enter 2 for each child if income is under 100,000. +2
H.) total= 6
Can someone explain to me if I’m calculating this correctly?
Hi Rhiannon,
Although you are following along with the personal allowances worksheet correctly, bear in mind that this calculates the maximum amount of allowances you can claim according to the IRS standards. You can always claim less allowances. A beneficial rule to follow is claim one allowance for yourself and an additional allowance for each dependent you will claim on your tax return. Remember that you can never claim your spouse as a dependent on your return (which is a bit misleading on the W-4 form). With all of this in mind, you may want to lower your allowances to two instead of six. If too much is withheld throughout the year, a refund will be issued to you. If too little is withheld, you will be issued a tax bill.
I am a widow. no children and work full time. I had to pay 350.00 to the federal this year. Wanting to change w-4 so that does not happen again. I claimed 0 in the past Now what
Hi Debbie,
You may want to consider updating your W-4 so that you have an additional amount withheld from each paycheck. You can report this on line 6 on page 1 of the W-4. Just to put it into perspective, you owed $350 this past year after filing. That means that your withholding amount was $350 short. If you divide that amount by the amount of pay periods left in the tax year and report that amount to be withheld each paycheck, you should make out a bit better this year.
Hello,
I am single with 2 jobs. Under allowances I claimed 0 for both jobs. in 2014 I did my taxes and found out I had to pay taxes. This year I filed my taxes and found out I have to pay again! Apparently, my 2nd job did not take out enough taxes so I am redoing my W4 and submitting it to my 2nd job. Should I submit a new W4 to my 1st job as well and request to have more taken out of my paycheck to avoid paying again next year?
Hi Ernesto,
This can happen sometimes, depending on your income and filing status. What you can do is report an additional amount on your W-4 to withhold from your paychecks (as you mentioned above). If your tax situation is similar to last year’s then you can roughly estimate how much more to have withheld per paycheck by dividing that overage amount by the amount of pay periods you have left in the year. If an excess of income ends up being withheld, then you will be issued a refund from the IRS.
Hello,
I work and so does my wife. We have 1 child. I make more then she does, combined we make around 77,000. I was going to claim 3 on my W4 and she was going to claim 0 will that work? We would like to break even at the end of the year not having to pay a lot in or even getting a small refund is that possible?
Thanks,
Brad
Hi Brad,
When filing a joint tax return, it is beneficial to determine who is earning more income and have that spouse claim the majority (or all) of the allowances. You have calculated this correctly. Assuming that your tax situation is pretty straight forward (as explained above) and there are no other limiting factors, you should be on your way to breaking even after filing your return for the year.