Filling out a W-4 is less mind-boggling than you think.
One of the first things you have to do when you get a new job is filling out a Form W-4 [Employee’s Withholding Allowance Certificate]. It is essential to complete a W-4 correctly because it determines how much tax will be withheld from your pay and how large your tax refund will be.
The first half of the form is pretty easy. You just have to fill in your name, address, and marital status.
Then you have to figure out how many allowances to claim. This number will determine the amount of your withholding.
Number of allowances to claim
Generally, the number of allowances you should claim will correspond to the number of personal and dependency exemptions you can claim on your tax return, but this is not always the case. Claiming zero allowances will result in the maximum amount of tax withheld. Every additional allowance you claim on top of that means that a little less tax is withheld.
You’re a Dependent:
If you can be claimed as a dependent on someone else’s tax return (ie: your parent’s, aunt’s, etc.), you should claim zero allowances. When you’re a dependent, the person who claims you get the benefit of your personal exemption and you, yourself, will end up owing slightly more in taxes. Hence, the tax should be withheld at the maximum rate of zero allowances.
You are Single:
As a single taxpayer, your W-4 form is straightforward enough but you do have several options when it comes to claiming allowances.
- If you’re single with one job, the allowances to exemptions ratio don’t exactly hold true. Most single people claim one allowance. However, this is likely to result in a refund. If you prefer the extra money after filing, then claiming one allowance is the choice for you.
- Claiming two allowances would get you closer to your exact tax liability, but may actually result in some tax due. That being said, you would have more take-home pay throughout the year since your employer wouldn’t be withholding as much tax from your paychecks.
Essentially you can choose whether to claim one or two, depending on the rest of your tax situation, but it’s probably safer to claim one.
You are Married:
Have you tied the knot? This can drastically change your tax situation. Don’t worry; it’s typically for the better. Being married opens up a few doors for you when it comes to tax benefits. You can now file a joint tax return. This is the absolute ideal filing status in regards to taking advantage of your benefits as a taxpayer. In most cases, being married also allows you to claim more allowances on your W-4.
- If you are married with no children, you should claim two allowances.
- If you are married with one child*, you should claim three allowances.
- If you are married with two children*, you should claim four allowances.
Other Situations:
Things get a little more complicated if you have multiple jobs, your spouse works, or you intend to itemize your deductions. In these cases you should turn your attention to page two of the W-4:
- Deductions and Adjustments Worksheet: Use this worksheet if you plan to itemize deductions on your tax return or claim adjustments to your income.
- Two-Earners/Multiple Jobs Worksheet: You will be directed to use this worksheet from the Personal Allowances Worksheet, line h. It is only necessary if you are married and earning a combined income of over $20,000 or if you are single with two jobs earning over $50,000.
The IRS also has a withholding calculator on their website that can give you a second opinion on how many allowances to claim.
The last thing you need to do is figure out if you are exempt from withholding. For most, this is not the case. Essentially, you are only exempt from withholding if all of the following is true:
- you aren’t a dependent,
- you had the right to a refund of all income tax withheld last year, and
- you are not required to file a return this year.
If you are exempt, you can write exempt in line seven. You’re done! All you have to do now is sign the form and hand it over to your employer.
Update Your W-4 For A Larger Refund or More in Your Paycheck
Even if you’ve been at your job for a while, it’s a good idea to monitor and, if necessary, update your W-4 every year. This is especially true if there’s been a major event in your life such as a marriage or the birth of a child.
The goal is to get your refund or tax due as close to $0 as possible. Getting a big refund when you file taxes is a great feeling. It can also trigger that your withholding needs to be adjusted. The reality is that you could be enjoying that money throughout the year instead of having it withheld from your paychecks.
Regardless, during tax season you’ll need to report the total earnings and tax withheld on a tax return. Use RapidTax to file your taxes without a hassle and receive the maximum refund possible!
I am married, and we have no children. We both work full time now and I am a full time student as of May of 2013. Last year when we filed our taxes we ended up owing because of my tax information, I only worked part time. In May of 2013 I was promoted to full time. I have my federal set at “0” so that the most will come out of my check. My husband has his exemption at “1”. When I filed our taxes for 2013 we were getting a refund until I put in my w-2. We owed almost $1000 between federal and state. Once I entered my school information, we got a refund. I don’t understand how I could still owe. How should we have our w-4’s filled out? Do I need to change anything or just have extra taken out for taxes?
Thanks so much!
Hi Erica,
Hmm, a main reason why people owe when filing their taxes is because they claimed a high number on their W-4. Are you sure you and your husband claimed 0 and 1 on your W-4? Also, you are filing as married filing jointly? If so, you should be saving money. If there are other reasons you are being taxed, it also would explain it (if you have other forms of income, like rentals, etc).
If not, I would double check with your employers to make sure you both are claiming 1 on your W-4s (or zero).
I checked on both of our w-4s and yes, I claim 0 and he claims 1. We have no other reasons to be taxed. We both only have one full time job each, and no rentals or anything like that. 🙁 It’s very frustrating, and I can’t seem to figure it out.
Hi good day!i just wanna know what should i put on w4.. i just got hired and my salary will be 66k.. i live in ny…only got 1 job and im single.. should i claim 1 allowance or 0?? Thank you…
Hi Sab,
Either is fine. Basically, if you claim 0, you’ll have more taxes taken out each pay period, but will receive a larger refund when filing your taxes. If you claim 1, you will have less taxes taken out of each paycheck, but probably won’t get a refund.
My husband and I are starting new jobs. We are a little confused on how to fill out our w4s. We have 3 children and would like to avoid paying back. Preferably we would like to receive a refund. Any advice?
Hi JJ,
You and your husband should split the number you are are claiming. Considering you have 3 children, the two of you should claim a total of 5. That means you should claim 2 and he should claim 3, or the reverse.
I am a single mother. I took a year off of work to take care of my baby and I am going to be starting a new job soon. I’ve never understood the whole allowances part on the W-4. How many allowances should I claim??
Hi Diandra,
Basically, the lower number you claim on your W-4, means the higher your chances for a tax refund when filing your taxes, but the more taxes taken out from each paycheck. The reverse is also true, the higher number you claim, means the lower your chances for a refund (and higher chances to have tax due), but less taxes are taken out from your paycheck. You want to claim the number closest to the number of people in your family, that you’ll be including on your tax return. If you are filing jointly, you and your spouse would split this number.
In your situation, if you only have one child, claiming 2 is fine (as long as no one else is claiming your child). If you want to receive a refund when filing your taxes next year, I would suggest claiming no more than 2.
I am not filing this year because I didn’t work last year so my spouse is claiming our son this year. Would it still be okay to claim 2 for next year? I am starting a new job and have to fill out the paperwork and I just want to make sure it’s ok to put 2 if my spouse claimed him this year. Thanks again.
Hello
I am married filing jointly and have one job and my wife is not working. We have two children and my yearly income is approximately 40k. I followed the calculator mentioned above and the number it came up with was 9. That seems like way too many. I would like to claim the correct amount so that I can break even or have just a very small tax return. I was thinking about 4 would be the correct number. What do you think?
Hi Stan,
Your number(4) seems more accurate. You should claim one for each person in your family whom does not work. Meaning, between your wife, you and your two kids, you should claim 4.