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!
Hi,
I will be divorced the end of April. We have two children. Should (can we), each of us claim one of them for 2016?
Also, should I claim SINGLE 0 and have extra cash taken out too (ie: $10 extra per paycheck)?
And, since I make more than my x wife, will be paying child support and spousal support, can I claim head of household? Thanks, Dan
Hi Dan,
You can update your W-4 Form to reflect what your filing status will be on the last day of the year. This will be the filing status on your tax return (no matter what it was at the start of the year). Claiming single with zero allowances and an additional amount withheld is allowed according to the IRS. In order to claim Head of Household, you will need to verify that you meet the qualifications set by the IRS (listed at the top of the W-4 form).
When it comes to splitting your dependents, the IRS automatically allows the custodial parent the right to claim the children as dependents. If you are not the custodial parent, your ex spouse will need to include Form 8332 to her tax return when filing. If you are the custodial parent, then you will need to include Form 8332 to your own tax return in order to allow your ex spouse to claim the child that you won’t be. You can find Form 8332 HERE.
Hello,
I filled out the following on my 2015 W-4 for my part-time job: “married” and “Total number of allowances you are claiming: 1.” However, upon doing our taxes with our accountant, we realized that my part-time employer only took out 2% per paycheck (twice a month), and now I owe approximately $1800 back to the federal government.
I double-checked the accuracy of my W4, and the HR manager at my part-time job verified that she inputted the correct info (“married” and “1 claimed allowance”). The only entity I have not spoken to yet is the payroll company contracted by my part-time employer to see if there was an error on their end.
So my question is: Is it possible for only 2% in federal taxes (for 2015) to be deducted from my biweekly paychecks when I filled out “married” and “Total number of allowances you are claiming: 1” on my 2015 W-4?
Thanks so much in advance for your time! Lauren
Hi Lauren,
When an employer receives a W-4 form from an employee, they withhold based on the number of allowances and the IRS Withholding Tables for that year. To give you an idea of what I’m talking about, take a look at the IRS website Publication 15. Now, this document is lengthy but just scroll down to the “Table 5. Percentage Method—2016 Amount for One Withholding Allowance“. As you will see on this table, each allowance is worth a certain amount based on how often you receive your paychecks (biweekly in your case). You can use the example below this table but use your income amount and number of allowances to calculate how much should have been withheld from your paychecks. This may be confusing but generally speaking, your tax withholding is not calculated as a percentage. I suggest contacting the payroll department and asking them how they calculated it to be only 2%.
Hi,
I am 19 and currently a dependent of my parents, as well as a full time student. I have been employed at one company since 2015 and my last day will be 3/26/2016 (so for tax purposes I am employed there 1/1/2016-3/26/2016). I am switching to a new job, but there is a 2 week overlap (I started my new job on 3/14/2016). So my question is, should I claim one allowance or zero allowances on my w4? I am working two jobs but it is for an extremely short period of time. Also, my earning for each job separately will be over $1500, but during the overlapping time period my earnings for each will not exceed $1500.
Hi Kiley,
I suggest completing your W-4 as you would if you had one job. The overlap will be for only one 2-week pay period so the tax deducted will have little effect on your overall withholding.
Hi,
I am a man working , I make $84k / year, I have two kids, my wife was not working, my wife just started to work, she makes like $270/ week, what should I put as allowance number in my w4 ?
thanks.
I
Hi Kamal,
The way you complete your W-4 will depend on your filing status and how many dependents you plan to claim on your tax return. You should also take into account how many allowances (if any at all) your wife will claim on her W-4 Form. The more allowances you claim, the less is withheld to cover your tax liability. The less allowances you claim, the more is withheld to cover your tax liability. If too much is withheld over the year, you will be issued a refund from the IRS. If too little is withheld, then you will have a tax bill after you file for the year.
My wife and I were very disappointed to see that our refund will from $3700 last year to $2400 this year after not changing our w-4s and having what we thought was a very small difference in our income. It’s also so frustrating knowing that my refund alone would be $2500!
I have always gotten a refund, but I am now ready to switch things up to increase my paychecks and do without the refund. We have no children, what would you say we should claim/have as our allowances to maximize our paychecks, while avoiding paying a tax bill? Please let me know if you need anymore information.
Hi Michael,
Although your financial situation has not changed much from last year, it is important to keep in mind that the IRS updates their limits and amounts each year. These updates could have an effect on how much of your income is withheld. Based on what you have stated above, I suggest that you each claim at least one allowance on your W-4 forms. If you feel that too much is being withheld, then increase your allowances to two.
Thank you very much for your time and help.