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!
W4 Question..I am married filing joint return. We purchased a home in 2015. Prepared my taxes and included interest taxes on house. We both claim married “0” allowances. Come to find out we owe $1,100. I was shocked.. My income is significantly higher than my husbands. $72k annual salary. I changed my W4 to married “1” but withhold a higher single rate. Of course now I am having much more taxes taken out. Prior to changing they were taking $401 every 2 weeks. Now they are taking $600 every 2 weeks. My husband did not change his W4. How can I accurately determine what we each need to put on our W4. I want to break even at the end of the year.
Hi Tammy,
This can happen based on certain tax situations where both spouses contribute to the household income. I suggest taking a look at the Two-Earners/Multiple Jobs Worksheet on Page 2 of the W-4 Form. This will help you to calculate an additional amount to be withheld from your paychecks without having to have your ‘tax withheld at higher single rate’.
Hi…
So – I am married. I make more money than my husband. We have a daughter. I would like to get more money from my paycheck throughout the year, but I also do not want to owe the IRS at the end of the year – and would like to get a decent refund at the end of the year. How many allowances would you suggest I claim?
Hi Geraldine,
Considering that you would like to have a refund and also get the most out of your paychecks, it is important to understand how the W-4 works. If you use the Personal Allowances Worksheet on Page 1, you will calculate the most allowances you should be claiming according to IRS rules. This does not mean that you will not owe the IRS. This worksheet allows you to claim the most allowances possible. The more allowances you claim, the less is withheld from your paycheck for tax liability. The less allowances you claim, the more is withheld from your paycheck for tax liability. If too little is withheld throughout the year, then you will owe the IRS after filing. If too much is withheld throughout the year, then you are issued a refund. It is 100% the same amount of tax you are paying to the IRS. It is more a matter of when you are paying. It is important to understand that you can always claim less allowances on your W-4 to help ensure that you have the minimum tax bill (or maximum refund) after filing for the year.
my wife and I file jointly, she just got a job, on the w4 does she do 0 or 1. I claim her and my daughter.
Hi Robert,
If your wife claims zero allowances, then she will have the maximum amount of income allowable withheld from her paychecks to cover taxes owed. If she claims one allowance, she will have slightly less withheld while seeing a bit more take home pay.
HI,
I am a single mother with 2 children and make 40k a year. I’m not sure what my tax allowance should be so that I do not owe money at the end of the year?
Hi Cassie,
A good rule of thumb to go by when considering the amount of allowances on your W-4 is to claim one for yourself and an additional one for each dependent. You can also claim an additional allowance for Head of Household filing status. Something to keep in mind is that you can always claim less allowances than calculated on the Personal Allowance Worksheet. The less allowances you claim, the higher your refund (or lower your tax bill) will be.
Hello, im a single parent with two kids i work two jobs, what should i put as my allowance?
Hi Rae,
This will depend on whether you plan to claim the head of household filing status on your tax return or file as single. A good rule of thumb is to claim one allowance for yourself and an additional allowance for each dependent you will claim on your tax return. If you will file as head of household, I suggest claiming an additional allowance on your W-4.