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!
Hi,
I had a few questions. I recently got married back Oct of this year. I just submitted a new w4 to my employer today, filing as married and claiming 4. I work full time making about 33k/yr and my husband does not work. We have two children. Previously to me getting married I claimed 3. After doing the worksheet, I am confused if I should claim 4 or 5 now?
Also, after reading some of the comments above, I am learning that I will now be considered married for the whole year. Before I got married in Oct I was filing as single HOH claiming 3. I enjoy having a larger refund, but with me being considered married for the full year, will I be expected to pay a lot of taxes back when it’s time to file?
Also, I recently put my youngest in day care a few months back. I plan to keep him in daycare and this time next year I will pay well over 2k in child care expenses. Since its only been a few months I still plan on claiming what I have paid out of pocket for this expense. I wasn’t sure if I could though since it is technically less than 2k right now and when I file taxes?
One last thing, in the past I have always gotten the child tax credit and expect it this year as well. With the change in my filing status, taking into consideration the child care expenses and child tax credit, do you still see me having to owe a lot of taxes back???
Hi Narry,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount withheld. If you claim a larger amount, you’ll have less withheld. 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.
Also, it will most likely have a positive financial effect that you are filing married instead of single.
If you create an account on our site and enter your information, you will be able to see your estimated refund or tax owed amount. I do suggest doing this as it is completely free to receive your estimate.
WELL HELLO…
I LIVE WITH MY BOYFRIEND BUT WE ARE NOT LEGALY MARRIED…
SHOUD HE FILE AS SINGLE HEAD OF HOUSEHOLD WHEN FILLING FOR OUR 2015 TAXES?
AND FOR ME DO I PUT 1 DEPENDENT FOR MY SELF ON MY W-4 OR CLAIM 0 SINCE WE HAVE NO KIDS…
Hi Diana,
I would suggest filing as single Head of Household as long as you meet the IRS guidelines to do so.
I would also suggest claiming one on your W-4 Form.
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount withheld. If you claim a larger amount, you’ll have less withheld. 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.
Great article… but I still nee a little guidance.
I am finally starting to earn a decent wage. I am at a new job that pays $100,000. I have 5 children. And as much as I love getting a refund at the end of the year, I need all the money I can get on a day-to-day basis. Is claiming “7” (as we are a family of 7) the best option for me? I’ve filled out so many W4s in my life, and still can’t figure out what is best 😉
Thanks for the help.
Hi David,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount withheld. If you claim a larger amount, you’ll have less withheld. 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.
Ijust started a new job and I know I filed my w-4 wrong.I want to claim myself and head of house hold should I put 1 or 2 .
Hi Sheritta,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount withheld. If you claim a larger amount, you’ll have less withheld. 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.
In order to do this, 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 am completing a W-4 for 2015. I am single and have 1 son who is 6. I don’t know how to complete the W-4 correctly so I don’t have to go anything when I do my taxes and that I get a refund back when I file.
A- enter 1 since I am single. B- enter 1 since I am single and have a job C- enter 0 since I don’t have a spouse D-enter 1 for number of dependents E- enter 1 for head of household F- enter 1 since I pay for childcare that is more than $2000 G- enter 2 since I have 1 dependent and make less then $65,000. For a total of 7. Is this correct???? I don’t want to have to owe anything when I do my taxes, I would definitely like to get a refund back. Thank you!!!!
Hi Stacey,
The general rule is that the more allowances you claim, the less withholding you’ll have taken out of your paycheck each pay period. By following the directions on the Personal Allowances Worksheet of your W-4 Form, you will calculate the maximum amount that you should claim. However, you can always claim less than that to ensure that enough will be withheld from each paycheck. If you claim zero, you’ll have the maximum amount withheld. If you claim a larger amount, you’ll have less withheld. 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.
In order to do this, 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.