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,
This is such a great information article well explained. but, I do have some doubts to figure out what should I fill.
I have started a full time job in US from 27th November 2017, I am married and have two children but my family is not in US yet ( they will be joining next yer).
Can you please help under what status I should fill w4 ( single or married ) ? how many allowances I can choose? Can i choose 4 allowances as my family is still dependent on me and I have to take care of child care and household back in my home country?
Really appreciate help here as I am not able to figure out what should be correct data I need to fill in W4.
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. The IRS also has a withholding calculator on their website that can help you determine how many allowances to claim.
I just got married my wife dont work we have 2 kids and im lost on all this mumbo jumbo
Following the instructions provided by the W-4, your allowance claim can be up to 4 allowances from the situation that you have outlined. You can also use the IRS Withholding calculator for further assistance as well.
okay so im not married but i live with my girlfriend in her moms house, we have one kid and i only have one job so how much should i put to claim on my w4 form?
I will only be claiming myself and my son.
Speaking with payroll will better inform you on the best number of allowances you should claim on your W-4. Typically you would like at the end of the year, to owe a small amount or receive a small refund. That way you can utilize most of your money earned throughout the year rather than having it sit until next year.
You can use the IRS withholding calculator to help you determine how many allowances you should claim on your W-4 Form. Click here to try the IRS Withholding Calculator.
Hello, thank you for your help. I am very confused.
My spouse and I will be filing jointly as we have in past years, now we have 1 child & qualify for the child care expenses credit & the child tax credit. Currently, when I follow the w4 instructions exactly, it would be 5 + an additional $244 to be withheld from the highest earner, then 0 for the 2nd earner. (both full time, 40hrs, jobs, approx $80k combined gross)
Your article says we should claim 3, but that doesn’t follow the form at all. If we follow your instructions to claim 3, is this how to divide it: 2 for the highest earner, 1 for the lower earner?
We would prefer to have less money taken throughout the year than to receive a large payout in the spring, but don’t want to owe.
Would greatly appreciate your help and expertise.
Thank you!
From the situation that you have outlined, claiming 5 allowances would be a conservative choice. It’s generally best to report conservatively, especially if you are unsure of how much you may end up owing or receiving as a refund. A precise amount can only be calculated if you have prior tax year information to work with, as well as earning about the same amount of income that you did previously. This also relies on your situation remaining the same as well. If you are looking for a more precise calculation, it would be best to speak with a local accountant.
My husband clams himself and me also claim married one works so thats 3 allowances on the w4 yet it seems not enough taxes are being taken out because we end up paying a large amount last yr and yr before. we have no dependents.
According to the W-4 on line B, you should claim 1 allowance for that section if you’re married and have only one job with a spouse that doesn’t work. In line C, it indicates that you may want to choose to enter 0 if both you and your spouse are working, in order to avoid having too little taxes withheld. You may want to claim 1 allowance for the W-4, as this will withhold more income for the taxes throughout the year, and will help you in lower the tax liability that you have been seeing year to year.
I advise that your husband reviews his W-4 with his HR Department to determine the optimal amount of allowances he should claim in order to avoid owing the IRS at the end of the year.
If I claim a dependent (1child) on my W4 and I am single, can the mother of my child claim our child when she files her taxes? What happens if I claim a dependent on my W4 and not when I file my taxes because the mother of my child will claim our child in hers, since it is most likely that she will get a higher return? Will I just not get the Child Credit or will I owe taxes?
Hello Cory,
You are going to owe more taxes. If you are withholding based on claiming the child but do not claim the child on your tax return, you do not actually qualify for Dependent Exemption and Child Tax Credit. Therefore, you are withholding too little and will result in a higher tax liability.