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 starts a new job next week and I’m confused on what to put for allowances. He is the only one that works, I stay home with our 2 kids. We want the most taken out of his check to get a bigger refund. Should we claim 0 or 1?
Using the IRS Withholding Calculator Tool will better assist you in determining the number of allowances you should claim. You should also get in touch with your payroll department, as they can better advise you on your personal situation.
Please I need help with my w-4.. Im single and have 2 jobs and put down head of household. I put down 2 allowances and wonder if I will owe at the end of the year. Please do you having any suggestions or advice because I already owe the it’s and im trying to fill out my paper work correctly. Thank you
When filling out your W-4, the more allowances you claim, the fewer taxes get withheld from each paycheck. The ideal situation is receiving a refund or having a tax liability closest to zero. That way you can use as much of your income earned throughout the year during the year it was earned. However, if it seems that you are owing a large liability at the end of the year, you may want to claim fewer allowances, but your taxes withheld will be higher. Another great tool to use is the IRS Withholding Calculator, but if you are still unsure, speaking with your payroll department may be the best course of action to take.
My wife and I file jointly, but my income is the only income, she is stay at home. We have 4 kids. How many allowances should I claim on my W-4? And do I put the same number for Federal, State and Local?
The rule of thumb for W-4 allowances is the more allowances you claim, the smaller amount of taxes your employer will withhold. If too little is withheld, you may receive a large tax liability when filing. It would be best for you to contact payroll and discuss with them what would be the best number of allowances you should claim. You can also use the IRS with holding calculator to help you determine how many allowances you should claim on your W-4 Form. Click here to try the IRS Withholding Calculator.
I have a job and so does my wife, we have two kids and they both qualify the past two years for the child credit. How many allowances should I put on my W4?
It would be best for you to speak with your payroll department on how many allowances you should claim. You can also use the withholding calculator tool that the IRS provides to determine your allowances as well.
Hello, I’m married with one child, and my wife is a stay at home mom, how should I file my w4?
It would be best for you to contact payroll department for their advisement. They would be able to better assess and provide you a number of allowance for you to claim.