How many Allowances on a w 4

How to Claim the Correct Number of Dependants on Your W-4

Tax documents are notoriously complicated, and the W-4 is one that every working person in America will have to get through.

Recent versions of the W-4 have a section called the “Personal Allowances Worksheet” that is intended to help you figure out how many allowances to claim.  While this is meant to be helpful, it can still be difficult to decipher; especially if this is your first job.

When you complete a W-4 for your employer, the only section you are actually required to fill out is at the bottom of page 1, called “Employee’s Withholding Allowance Certificate”.  Everything else is information meant to help you complete this section.

The W-4 is used to tell the IRS about your household structure so that they can calculate how much your income will be taxed every pay period.  The number of exemptions you claim is recorded in Box #5 of the W-4 form.  In general, an employee will claim themselves as well as any non-working members of their household that they are financially responsible for.  So if you are married, your spouse has a job, and you have 2 children you would most likely claim 3 exemptions (you + 2 children).

On the other hand, if you are single and you live alone or with a roommate, then you would most likely claim 1 exemption.  You would not claim your roommate because you are not financially responsible for that person.

It is also common for individuals who are under 18 years old, or who are full time students, to be claimed as a dependant on their parent’s income taxes.  If your parent or guardian claims you as a dependant on their income taxes, then you would most likely claim 0 exemptions on your W-4 form.

In most cases, the more exemptions you claim, the fewer taxes withheld from each paycheck.  There is really no right or wrong amount of exemptions for you to claim on your W-4, and your employer is required to let you change that information at any time.

It is important to remember, however, that at the end of the year when you file your income taxes, the amount you owe to the government will be based on your W-2 earning information as well as the actual makeup of your household.  This will determine whether or not you have paid enough taxes throughout the year.

If you paid more than your share, you will receive a refund check from the government.  If you did not pay as much as you should have, then you will owe the government money.

If you are in a situation where you have had to pay the government because you did not pay enough income taxes last year, you may want to consider reducing the number of allowances you claim on your W-4.  You could also choose to have a little extra money withheld from each paycheck so that you won’t owe money next year.  If you choose to have extra money withheld, you can enter that amount into Box #6 on the W-4 form.  The total that you enter in Box #6 will be withheld from every single paycheck and go towards your income taxes.

If you received a full refund from the government last year (meaning that you got back everything that you paid towards income taxes per your W-2), and you don’t expect your situation to change this year, then you may also want to consider updating you W-4 information.  If you write the word “exempt” in Box #7 of your W-4 form, then the government will not withhold any taxes from your paychecks (and will not receive a refund at the end of the year).

When filling out any tax or employment document is very important to be as truthful and accurate as possible.  You should not be afraid to ask for help or clarification of anything that you do not understand, because the best decision you can make for yourself is an informed decision.

If you are still unsure how many allowances you should claim on your W-4, the IRS has a withholding calculator that you may find very useful.