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!
My husband and I have been separated for over a year now. We still own 2 homes together. We both work full time, but I earn a 1/4/month of what he earns. Should I file my status on my W-4 form as single or continue to file as married?
Hi Leslie,
When it comes to your filing status for tax purposes, you should complete your W-4 with the status you will be on the last day of the year (December 31). If you are to be legally divorced by then, you should claim single. If not, then you are still legally married and should complete your W-4 and tax return to reflect that.
hello,
I am single, no children live by myself. My mom advised I should be claiming 0 on my w4, up until this point I have been claiming one. Salary is $43k a year, will this affect me having to pay taxes?
Thank you!
Hi Tania,
The amount of allowances you claim on your W-4 form affects how much will be withheld from each of your paychecks to cover taxes owed to the IRS. The more allowances you claim, the less will be withheld, meaning you will see more take-home pay. The less allowances you claim, the more will be withheld, meaning you will have less in each paycheck. If too much is withheld throughout the year, you will be issued a tax refund from the IRS. If too little is withheld from your paychecks, then you will end up owing the IRS.
Now that you have a basis of how it works, we can consider your situation specifically. Right now, you are claiming one allowance which means that a sufficient amount of income is being withheld from each of your paychecks and going toward taxes to the IRS. Take a look at one of your paystubs now if you have one handy. You will see the amount labeled as “federal withholding”. If you update your W-4 form to claim zero allowances, then even more of your income will be withheld from your paychecks going forward. The choice is yours whether or not you want to claim zero allowances or stick with one allowance.
Hello,
Recently, I began to fill out my W-4 form for work study but I am unsure of whether I should claim exempt or not because the criteria confused me a bit. I am 18 years old, claimed as a dependent on my parent’s taxes, have never had a job or filed taxes before, and will be enrolled as a full-time college student this upcoming school year. Am I exempt? I do not want to input the wrong information on the form.
Thank you, I would appreciate any clarification!
Hi Lupita,
There are only certain circumstances that you should claim exempt on your W-4 form so you want to be careful when choosing to do so. We’ve published an article about when you can and can’t claim exempt HERE.
I need help! My husband and I need to correct our W4’s because we recently got married. We have 2 children together and I have 2 older children one of which I’m still claiming because he’s in college and gets financial aid. So my husband and I both work full time jobs, he also just started a 2nd job. I was claiming 7 at one time and my HR dept told me that had to be incorrect and I’ll end up owing more at tax time. They told me that most people claim on 0,1 or 2 on line 5 at the bottom of the W4. I don’t want to end up owing at the end of the year and I don’t need to have a huge refund at tax time. I want the most out of my paychecks every 2 weeks throughout the year.
Hi Stacey,
When completing your W-4 form, it is important to know how they affect your income tax. The more allowances you claim, the less tax is withheld from your paychecks. The less allowances you claim on your W-4, the more is withheld from your paychecks. If you claim zero allowances, you are giving permission to have the maximum amount withheld from your paychecks. If too much is withheld over the year, you will be issued a tax refund from the IRS. If too little was withheld, you will be issued a tax bill to pay back what is still owed in tax to the IRS.
It is also important to know that you have a bit of leeway with how you choose to complete your W-4 since the total amount of tax you are responsible to pay will not change. The amount of allowances you claim on your W-4 only deciphers when you will pay that tax; in a lump sum after filing for the year OR little by little throughout the year by having it deducted from your paychecks.
Since you and your spouse now have three sources of income, you would benefit most by completing the Personal Allowances Worksheet on page 1 of the W-4 and also completing the Two Earners/Multiple Jobs Worksheet on page 2 of the W-4. This will allow you to get the most out of each paycheck. Your other option would be to claim fewer allowances which will allow for more to be withheld from your paychecks and possibly be issued a refund after filing for the year. Most couples in similar tax situations will have the spouse earning the higher income claim the majority or all of the allowances on their W-4 while the other lower-earning spouse claims zero or one allowance on their W-4.
I have recently married. I will be filing married-separate.
I have 2 children (one will be 17 next month so I know I’m losing that tax credit, and the other is 13).
I forgot to do a new W4 when I got married but am now changing jobs.
I usually claim 1. How should I claim now that I am married and will be losing my daughter as a tax credit?
Thank you for your help.
Hi Andrea,
I would suggest completing the personal allowances worksheet on page 1 of the W-4 form. The more allowances you claim, the less is withheld to cover taxes owed to the IRS. The less allowances claimed, the more is withheld from your income. If too little is withheld, you will have a tax amount due. If too much is withheld, you will be issued a refund from the IRS. You mentioned that you are currently claiming one allowance on your W-4 form. You can continue to do this. However, keep in mind that you can also claim more allowances so that less is being withheld from your take-home pay.