Help Filling Out a W-4

Your W-4 is an important thing to get right because it ultimately decides how big your tax refund is – or if you owe the IRS money

If you are an employee, you pay income tax through withholding – tax money your employer takes out of your paycheck each pay period.

You can determine how much gets taken out by filling out Form W-4 [Employee’s Withholding Allowance Certificate]. If too much gets taken out, you will receive a refund when you file taxes. If not enough is taken out, you will have to pay the IRS.

You will be asked to fill out a W-4 when you start a new job. But you can also fill out a new W-4 any time if you wish to adjust your withholding. You should especially be sure to do so after major life events such as getting married or the birth of a new child.

How to Fill Out the Form

The first part of the form should be easy enough. It’s just your personal information: name, address, social security number, etc.

The complicated part doesn’t come until line 5, when you have to enter the total number of allowances you are claiming. Allowances determine how much money is withheld from your pay. The higher the number of allowances, the less is withheld.

Most people will be able to use the Personal Allowances Worksheet directly above the form itself to figure how many allowances they should claim. A general rule of thumb to follow is that you should claim one allowance for every person in your family. For example, a married man whose spouse doesn’t work and who has two kids should probably claim four allowances.

Single people actually have something of a choice. They can either claim one or two allowances. Claiming two allowances means the tax withheld will likely ends up very close to their total liability, resulting in a very small refund or even a tax due. If you really want to be 100% sure that you won’t end up owing anything, it’s probably best to claim one allowance. More will be withheld, but you’ll also get a bigger refund.

Special Cases

Here are some tips to point you in the right direction, especially if you have an unusual situation.

  • Married couples who plan to file a joint return should calculate their allowances together and divide the total between them. You can use the Two-Earners/Multiple Jobs Worksheet on the second page of the form to calculate your total number of allowances.

Here’s what the IRS has to say about it: “If both you and your spouse are employed and expect to file a joint return, figure your withholding allowances using your combined income, adjustments, deductions, exemptions, and credits. Use only one set of worksheets. You can divide your total allowances any way but you cannot claim an allowance that your spouse also claims.”

  • If you plan to itemize deductions or claim certain credits or adjustments to income, there is a Deductions and Adjustments Worksheet on the second page of the form that can help you work out how many allowances to claim.
  • If you are an employee at more than one job, you can also utilize the Two-Earners/Multiple Jobs Worksheet on page two of the form.

Once you’ve calculated how many allowances you should claim, you can double check your work by utilizing the IRS Withholding Calculator.

Remember, that a tax refund is not necessarily a good thing. Although it’s nice to receive a big lump of money from the IRS when you file taxes, that’s money that you could have been spending, saving, or investing all year long. The goal is to get your estimated tax refund/tax due as close to $0 as possible.

Get Your Refund

Photo via Quinn Dombrowski on Flickr.

41 Replies to “Help Filling Out a W-4”

  1. I am a military spouse and we have 1 child. How do I calculate my allowances on my W4 form? What’s my final number of allowances? I do not want to owe close to anything at the end of tax season. I’m not having anything withheld from federal.l right now.

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