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 have just started a job (part time). My spouse works full time and we have one baby who just started daycare. All this happened one week ago. I am filling out W-4. I have so far only entered ‘1’ for myself (line A of personal allowances worksheet) and not sure if I am supposed to enter a 2 on Line G for child tax credit? My husband has already claimed three allowances on his W-4. He had filled his out last year when I was staying home raising our baby. I am assuming that I should just put a 0 in Line G since my husband will be claiming her as a dependent. We do make less than 95,000 combined so I am assuming my spouse should put a 2 on Line G of his W-4 if he hasn’t already done so in the past? We can’t recall, so he is going to look his up for editing. I was going to chck your calculator link, but I don’t have a paystub yet and really just desperately need the answer re: Line G. Thank you SO very much in advance!!
Hi Meredith,
Congratulations on the new job!
You are correct; since your husband will be claiming the child tax credit and your daughter as a dependent, you will not.
Hello,
I am very confused on how to fill out my w4. I am starting a new job soon. I am a single mother with one child. I cannot be claimed but I want to claim my child. I want to also claim the child tax credit. I want to make sure I will not owe money to IRS. I don’t want a big fat refund, I rather just have my money now. How many allowances should I claim?
Hi Lu,
As you will see on your W4 form, you can claim three allowances (four if you are filing as head of household). Keep in mind that this amount is the maximum that you should be claiming. You can always claim less to insure that you will not owe money after filing your tax return.
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.
Hello, I’m a 23 year old recent college grad & unfortunately my parents have never educated me on how to fill out a w4 properly. They no longer claim me as a dependent so I assume I am to put 1 as my allowance? However at my first job, I made about 28,000 annually & the IRS took out alot almost 300-400 per bi-weekly check which makes me think I filled my W4 incorrectly. I also selected Exempt because my employer stated I do and recieved a small refund last year, about $1200. Therefore my question is specifically for my next job because I resigned from my first & relocated is how do I correctly fill out my next W4? For two possible options, if I have 1 full Time job or If i have 2 part time jobs. Again I am single, I recieved a refund last year and I want the minimum taken out as possible. Should I simply claim 1 allowance, myself, and exempt or 0 allowance and not expempt?
Hi Jay,
I suggest claiming one allowance (not exempt). If you have two part time jobs, claim one at the higher paying job and zero at the other.
I have always claimed 1 (myself) on my taxes but recently I adjusted it to 8 because I started making more but was bringing less home; immediately. What can I anticipate at the end of the year. Also, I started off the first half of the year claiming 1 and the since about June I made the adjustment. Thanks
Hi Eddie,
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 larger number,such as eight, you’ll have less taken out. This also increases your chance of owing at the end of the tax year. 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 HAVE THREE QUESTIONS. IM MARRIED WITH TWO KIDS 6 YEAR OLD AND 1 YEAR OLD. I HAVE A HUGE AMOUT OF TAXES AND HEALTH INSURANCE ETC COMING OUT EVERY WEEK. I HAD A 2500 DOLLAR CHECK AND TAKE HOME WAS A LITTLE LESS THAN 1500. I BELIVED I CLAIMED ZERO LAST YEAR. MY QUESTION IS SHOULD I CLAIM 2 SO LESS TAXES COME OUT BUT STILL HAVE A GOOD CHANCE OF GETTIN A REFUND, SECOND MY WIFE IS CLAIMING KIDS TO AND SHOULD WE FILE TOGETHER?? HELP INCOME TOGETTING GROSS WAS 49500 THIS YEAR ON PACE FOR 52-54K
Hi Pollini,
When you file your tax return at the end of the year, I suggest married filing jointly as your filing status. Filing a joint return with your spouse is typically the most beneficial financially. Also, when completing your W4 form, you will benefit the most if the spouse with the higher income claims the dependents. Dependents can only be claimed once when filing your tax return at the end of the year. However, I do suggest increasing your W4 allowances now to at least claiming one.