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!
Hello, I’m a single mother with one child. I work full time and I put 6 on my w-4. I only make 24,000 a year, so will I owe come tax time?? If I don’t, will I still receive the child tax credit?
Hi Bonnie,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
I suggest taking a look at the IRS Withholding Calculator. It only takes a few minutes to complete and will give you the most accurate amount of allowances to claim in order to reach that break-even point at the end of the tax year.
Ok im in a pickel. my husband had a job and claim no one at work. we filed jointly and then claim our daughter. now i am working with the lower income and i claim my daughter at my work but he dont did we do it wrong will this get us in trouble. how do we file jointly at tax time or are we ok
Hi Samantha,
Typically the spouse with the higher income will claim the majority or all of the allowances on their W4. It just ends up being more beneficial. However you should still be alright when it comes to filing your return. Also,you can still file jointly.
I really need help understanding my W4. I’m a single mom with 1 child, 1 job. My mom keeps saying “file single and 1” but idk what she even means. I followed my w4 and I end up with like 5 as my number at the bottom and because of that my job isnt holding enough taxes out and i dont want it to affect me at the end of the year. is there anyone that can help me understand how to do this please.
Hi Laci,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number (such as 5), you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
I also suggest taking a look at the IRS Withholding Calculator. It only takes a few minutes to complete and will give you the most accurate amount of allowances to claim in order to reach that break-even point at the end of the tax year.
Hello I am newly married and have to fill out a new w4 form I make 45000 yearly and my husband makes 35000 yearly and we have no kids. I have no clue how I should fill this out because I want to file jointly and I do not want a lot of taxes taken out of my pay check…..Please help
Hi Dominique,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck. If you claim zero, you’ll have the maximum amount taken out. If you claim a large number, you’ll have less taken out. The absolute ideal scenario is to have your tax liability (or refund) at the end of the year be as close to zero as possible.
I suggest taking a look at the IRS Withholding Calculator. It only takes a few minutes to complete and will give you the most accurate amount of allowances to claim in order to reach that break-even point at the end of the tax year.
I Just updated my w-4 today but I’ve been married since February 2014 and had my first child in March 2014. Made the changes to my w-4 as married and claiming 3 allowances. Now what Happens to the money that had been taken from my checks from the previous months? Do I get reimburse at the end of the year? Or is there a way to backtrack pay from previous months via my employer? I know I should have made the changes sooner but totally forgot about it. Please advice.
-Thanks Alex
Hi Alex,
Unfortunately, when you change the amount of allowances you’re claiming, it takes effect from that pay period onward. It does not have an effect on previous pay periods. However, since you were probably claiming less than three allowances prior to the update, you will most likely receive a refund after filing your taxes for this financial year.