The last thing you want to do is frantically run up to your boss asking “How many allowances do I claim on my W-4?”.
Being aware of the number of allowances you are claiming on a Form W-4 [Employee’s Withholding Allowance Certificate] is important for a variety of reasons. Most importantly, the number of allowances you claim on a W-4 determines the following;
- how much tax will be taken from your income (aka the withholding amount)
- the size of your tax refund
Steps to filling out a W-4
You’ll need to follow four simple steps when filling out your W-4 Form:
- Fill out your personal information (Name, Date of Birth, Address, Marital Status)
- Know the number of personal and dependency exemptions you are claiming on your tax return.
- Based on the number from step 2, use that number to help determine your number of allowances.
- Don’t forget to sign the W-4 and turn it into your employer!
The allowances you claim while filling out a W-4 if you are single will differ from the allowances you claim if you are married or have kids.
Claiming zero allowances
- The maximum amount of tax is withheld. Meaning, when it comes time to file your tax return you will most likely receive a refund.
- You’re being claimed as a dependent on someone else’s tax return.
Claiming one allowance (ideal if you are single with one job)
- You’re single and have one job. Claiming one allowance will most likely result in a refund when you file your taxes.
Claiming two allowances
- You are single. Claiming two allowances will get you close to your tax liability but may result in tax due when filing your taxes.
- You’re single and work more than one job. Claim one allowance at each job or two allowances at one job and zero at the other.
- You’re married.
Claiming three allowances
- You are married with one child.
Claiming additional allowances
- File as head of household if you are eligible. You are able to claim additional allowances.
- You had at least $2,000 of child or dependent care expenses that you plan on claiming credit
- You’re eligible to claim the Child Tax Credit
Can I fill out a new W-4 form?
Yes, employees can submit a new W-4 form to their employee at any time during their employment. Have you recently started a second job, had a baby, or tied the knot? Life changes such as these should encourage you to update your W-4 withholding.
A great tool to help you while filling out a W-4 is the IRS Withholding Calculator, located on the IRS website.
Claiming zero allowances means less take home pay, but a bigger tax refund during tax season.
The number you report on a W-4 will ultimately determine your take home pay and your tax refund. Don’t write down any number. Take the few extra minutes to really assess your situation and fill in the W-4 accordingly. By doing so you’re less likely find yourself in a difficult financial situation.
Then, when you’re ready to file your taxes, you’ll have a heads up on whether or not you’ll be receiving a tax refund!
I am married and have 2 children. One child just turned 18. My husband files head of household. If we want more money during the year but DO NOT want to pay at time of Income Tax season how many should we each file??
Hi Susette,
For your situation, I suggest taking a look at the IRS Withholding Calculator. This will help you to make the best decision since you have a number of factors to take into consideration.
Keep in mind that the more allowances that you claim, the more you will see each paycheck. However, with more allowances, your end-of-year refund decreases (also increasing your chances of owing money).
I am married & we both work, Also I have one child. What should I choose?
Hi Kasey,
For your situation, you may be eligible for the child tax credit. I suggest referring to the IRS Withholding Calculator.
My husband and I are filing chapter 13 and it was advised by our attorney to increase our exemptions on our pay to decrease what refund we may recieve at the end of the year so it isnt taken from us as repayment to debt. We are married filing joint, I claim two kids every year and my husband alternates claiming 1 or 2 children a year(arrangement from previous marriage) with next tax year 2014 he will be claiming 1 child. What is the most we should each claim on our payroll without having to worry about oweing anything back later? We do own a home.
Hi V Jenkinson,
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 so that you reach that break-even point where you won’t have too large of a refund or amount owed at the end of the tax year.
I am single with one job and no dependents. I want more money in my paycheck but don’t want to owe a huge amount at tax time. Any suggestions as to how many allowances to with hold.
Thanks
Hi Melanie,
Keep in mind that the more allowances that you claim, the more money will be in each paycheck and the smaller your refund will be at the end of the tax year. This being said, you can either claim 0 or 1 in your situation. If you claim 0, you will have the maximum amount withheld each paycheck yet a higher refund. If you claim 1, you will have a higher paycheck than if you claimed 0 yet a smaller refund.
I’m in the same situation, but was wondering if it would be worth me claiming 2 allowances? I got about $950 back on my refund last year, but would rather have that money in my paycheck a and possibly owe a small a amount at tax time. Would this be the way to go?
My wife and i both work, make about the same about of money and have 2 young kids. I claimed zero years ago when I started working fulltime, she was 1, now she changed hers to 2, should I claim 1 or 2? can we both claim the kids as a dependant or does it add both claims since we file jointly?
Hi Adam,
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 deduct between you and your wife based on the specific answers you provide.