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!
Me and my girlfriend live together .we have two kids and and her eighteen year old cousin that goes to college how should i fill out my w4..right now i have single with 2
Hi Max,
First, I suggest determining if you will be claiming your girlfriend as a dependent or not. If not and you both are filling out a W4, you will need to determine who will be claiming each dependent. Once you have figured out the maximum amount of allowances you can claim, I suggest keeping in mind that you can always claim fewer to save yourself the possible aggravation of owing money at the end of the tax year.
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 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.
My boyfriend and i live together with our 2year old daughter we are not married. I recently started working how many allowances should i claim? how should our taxes be done? together? seperately etc? Whos head of household? Who claims our daughter? he makes more than i do and expenses are divided we both contribute to pay our bills and our daughters needs. I do go to school also and receive financial aid how does that affect my taxes and how to file them? Im sorry for the bunch of questions im new to this. Any other things that i need to know please do let me know i dont want to be lost when it comes time to file taxes and i definitely dont want to owe any money.
thank you
Hi Isa,
No need to apologize; taxes get a bit confusing.
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.
Assuming that you and your boyfriend will be filing separately, I suggest first deciding who will be claiming your daughter. Typically, it is more beneficial for the partner who is earning the higher income to claim the majority of allowances. In your case, I would suggest your boyfriend claim your daughter and himself. You can then claim yourself with one allowance.
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.
I just recently got married in July and my wife is studying and does Not work. Prior to the marriage I was claiming: single and 1.
income 70K
Now should I change it to ?
status: Married
allowances: 2
Hi Ed,
I would look into if you are able to claim your wife as a dependent. If you are then I suggest claiming two allowances.
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.
If you have more than one income in the family and especially if you have real estate income and expenses what I do is claim the maximum 9 dependents. This lets me use more of my money for the year and at the end I pay a little or get back a little. Why does anyone want the IRS use their money during the year?
When we file at the end we take our standard deductions and reconsile with what we are owed or owe. The IRS wants only what is due them legally after you file . I cant understand why people get so excitedabout getting money back at the end since its their money they are getting back!!
I am recently married and am trying to complete new W-4’s for my wife and I. After completing the Deductions and Adjustments worksheet along with the Multiple Jobs Worksheet, it was suggested that I take 0 allowances and also have a small withholding to cover my tax obligation. My question is this: does this additional withholding found on line 9 of the Multiple Jobs Worksheet represent the total amount to be withheld between my wife and I or just what I should withhold (meaning she would also have the same amount withheld)?
Hi Brian,
You both will be filling out your own individual W4 and giving it to your pay roll department. Line 9 on your W4 will represent your own withheld amount per paycheck. The same goes for your wife.