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!
I am married with 2 kids my wife works but my check is larger. We currently receive a large refund at the end of each year but would like to receive a smaller refund or break even. We do not want to pay taxes at the end of the year. I currently claim single with no dependants as I have not changed my form since I started working which was before kids and marriage. Thank you for your advice.
Hi Josh,
The total number you and your wife combined should claim on your W-4 forms is 4 (claim one for each person). That means, you should claim 2 and she should claim 2. If you claimed 1 when you initially filled out your W-4 (before you had children and a wife), you don’t have to change it and your wife can claim 3 (or less) on her W-4.
The higher number you claim, means fewer taxes are taken out from your paycheck (which means a bigger paycheck). The lower number you claim means more taxes are taken out from your paycheck but the higher your chances for a larger refund when filing your taxes. It’s all about finding a balance. If you want to receive a refund at the end of the year, you and your wife combined should definitely not claim a total more than 4. With that said, claiming anything under 4 is fine too and will most likely result in a tax refund when filing.
Best of luck!
Hi. I just started a part time job. My husband has a full time job and makes about $100,000 and we always get a refund. He probably has 2 allowances, but not sure. If I put 4 allowances will we still get a refund?
You should definitely put 4 allowances (unless you have 3 or 4 children). If you put 4 allowances on your W-4, you will end up paying taxes and not receive a refund. Based off of the total number of people in your family, is the total number you and your husband should claim combined. If it’s just you and your husband, you should claim a total of 2 allowances. That means he can claim 2 and you claim 0 or in a different case, you can claim 1 and he can claim 1. If you have children, the total number between the two of you will increase by 1 per child.
In the big picture you should know that the higher the number you claim means the less taxes are taken out each pay period and lower chances to receive a refund when filing. The lower the number you claim means the more taxes taken out each pay period and the more likely you are to receive a larger tax refund when filing. The key is to find a balance.
Hi, i am putting 2 for my allowances. I am single with one job and no one can claim me as a dependent. Will i still receive a refund? I don’t want to owe back taxes. My income is roughly $30k. Thank you
If you don’t want to owe tax back when filing, I would suggest claiming 1 allowance. Claiming two allowances will put you on the border of possibly having to owe taxes.
If I change my allowance to 1 right now will it help or will it be too late and only apply when i file taxes next year?
Hi,
My Husband and I had a child in 2013 and thought we needed to change our W-4. Currently my husband (larger wage earner) claims 2 and I claim 0 plus an additional amount based on the income calculations.
When I went to reassess our W-4 I just can’t figure out what we should put. We end up with a 4 in line H (1 for myself, 1 for my husband, 1 for my child, and 1 for childcare). So should we change it to my husband claims 4 and I claim 0 plus the additional amount? I thought you should never claim higher than the number of people in your situation.
Part of the reason we are so confused is because when we went to the withholding calculator it said that my husband should claim 0 and I should claim 1. This seems REALLY wrong.
Please help!
Thank you!
Hi Debra,
Based off of the total number of people in your family, is the total number you and your husband should claim combined. In your case, the number is three. That means on your W-4, you can claim 1 and he can claim two or you can claim 0 and he can claim 3, etc.
If you leave your W-4 the way it was (your husband claiming 2 and you claiming 0), you will just receive a larger refund when filing your taxes while your paychecks will be less since more taxes are being taken out. In the big picture you should know that the higher the number you claim means the less taxes are taken out each pay period and lower chances to receive a refund when filing. The lower the number you claim means the more taxes taken out each pay period and the more likely you are to receive a larger tax refund when filing. The key is to find a balance.
So I’m a Little Confused. My husband is in the military and we have 3 children. My husband claims HOH, myself, and our 3 children since we’ve been married. I just started a new job and I put 1 for allowances and I’m confused as to how to fill this form out correctly.
Hi, You can only qualify for head of household if you are unmarried and file separate tax return. When filling out your W-4, claiming 1 allowance is fine. Basically, your husband and yourself can claim a total of 5 on your W-4s. That means, you can claim 3 and he can claim 2, or you can claim 1 and he can claim 4, etc.