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 am not a dependant and I have a child on the way. Would I fill out the first line of the form as a 0 or a 1. Can I claim my child yet even though she is not born yet?
If your child is not yet born, you cannot claim him/her as a dependent.
However, you get the entire tax deduction for the year your baby is born, even if the date of birth is Dec 31st. Keep in mind, your child must have a SSN in order to qualify as your dependent.
When you become eligible to claim your your child on your return, the IRS has a tool to help you determine how many allowances you should claim on your W-4 Form. Here is a link to the IRS Withholding Calculator.
Ok I am starting a new job and have to fill out a W4, this is the first time I am filling this form out. I am married with 2 kids, my wife does not work what do I write down as my allowances? Like in Line H and in number 5?
For help with your withholding, you may use the IRS Withholding Calculator. This easy-to-use calculator can help you figure your federal income tax withholding so your employer can withhold the correct amount from your pay. This is particularly helpful if you’ve had too much or too little withheld in the past, your situation has changed, or you are starting a new job.
I need assistance with my W4. I am single (HOH) with one child under 17. I do not understand why I owed taxes this year. I claimed 2 on my W4 and still owed the IRS $500. I have a second job where I claim 0 to have the most taxes taken out. Is this incorrect? Should both W4 be the same?
The IRS has a tool to help you determine how many allowances you should claim on your W-4 Form. Simply click here to use the IRS withholding calculator.
I am working 25 hours a week at 11.00 an hour I am paid Bi-weekly I am married with two children should I claim exempt and if i do so will I owe taxes at the end of the year
For help with your withholding, you may use the IRS Withholding Calculator. This easy-to-use calculator can help you figure your federal income tax withholding so your employer can withhold the correct amount from your pay. This is particularly helpful if you’ve had too much or too little withheld in the past, your situation has changed, or you are starting a new job.
Hi,
On line G I am confused on what number to put. I make less than 70,000 a year. I have 2 small children. It states to put “2” for each eligible child, so I am assuming since it is 2 for EACH that would equal to 4. Then it continues to say if it is 2 eligible children then less “1” which would give a final result of 3 for line G because I only have 2 dependents. I want to get more back at the end of the year and owe less when I file taxes. As of right now I have 2 on line G should I change it to 3? That would result to an 8 on line H if I enter 3 for line G, because I am single, with one job and head of household. My old W4 has 7 on line H. Should I leave it as it is?
Assuming both of your dependents qualify for the Child Tax Credit, you have followed the instructions correctly on the W-4 and “3” would be the correct number for line G. However, if you would prefer a better chance at receiving a higher tax refund at the end of the year rather than a tax due, then you may leave the entry at “2” or lower if you prefer to have more taxes withheld during the year. The higher the allowances (Line H), the less taxes are withheld by your employer, which may result in a tax due. The lower the allowances (Line H), the more taxes are withheld by your employer, which may result in a tax refund. We do recommend that you strictly follow the instructions on the W-4, but the decision is up to you.