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.
Photo via Quinn Dombrowski on Flickr.
Hi, I start a work tomorrow and I need help to fill out my W4.
Im divorced and I have 01 kid 7 year old, my dependent.
my annual salary will be 50k
line A; 1
Line B: blank
line c: blank
line d: 1
Line e: blank
line f : blank
line G: blank
line H: 2???
I want receive my pay check good and not pay tax
From the situation that you have outlined, you can claim up to 3 allowances, however, if you are also going to file as head of household, you can claim up to 4 allowances.
I am single with no kids I work one full-time job and one part-time job currently I’m claiming 0 at both jobs but I’ve been having second thoughts wondering if I should claim 0 at one job and claim one at the other which job should I claim 1 or 0 at the job that I make the most money at or the job that I make the less money at yearly thank you please help
Please follow the instructions on the W-4 form for both jobs. It is very likely your allowance count for each job is “1”, depending on how much you make at each job this could change.
Hi,
I will start working full time. I am single and dependent. using the personal allowances worksheet shows that I should claim 3 allowances. I wonder if i should input 1 instead to avoid owing IRS by the end of the year. my income would be 50k/year.
As to how many allowances you should claim on your W-4, generally the more allowances that you claim, the less taxes the IRS will withhold from your payroll. The lower amount of allowances that you claim, will allow them to withhold more taxes from your paychecks. And when you are ready to file your 2017 tax return, you can visit our website rapidtax.com where we will be able to assist you with filing through the tax season.
I started back working again in November. My employer automatically done the w-4 form as exemption 1. No taxes are being taken out when have 80 hours, @ $634. How do I claim on my w-4 form without having to owe taxes? My husband & I both work. He makes the more $ an hour than I do. He doesn’t have any money hardly taken out of his check either when he makes nearly $400/ week for 30 hours. What is the difference with allowances and exemptions?
The higher amount of allowances you claim will result in you being exempt from being taxed more. You can discuss with your employer on changing the number of allowances you would like to claim on your W-4, and the lower the value, the more taxes you will have end up being withheld from your payroll check throughout the year. The advantage of this is that you are more than likely due a refund at the end of the tax year for over payment of taxes rather than having a tax liability by the new tax season cycle.
My wife has her first job since we got married six years ago, she works part time and I work full time. We live in Washington State and she is paid the current minimum wage of $9.47 and I make $10.00 per hour. I just started my job and there is only 10 weeks left in 2016. How do I fill out the “Two-Earners/Multiple Jobs” worksheet on the 2016 W-4 form?
Hi Russell,
On page 2 of the W-4 form, you’ll see the Worksheet. Use tables 1 and 2 and the married filing jointly columns to fill out lines 1-9. Once you calculate your amount on line 8, you’ll divide that amount by the number of pay periods left in the year (NOT the total amount of pay periods for the whole year). That amount will be on line 9. This is the additional amount you will withhold from each paycheck. Remember to split that amount between the two of you.