Confused about how to fill out your W-4 form?
What Are Allowances on a W-4? Posted by admin on October 18, Last modified: When beginning a new job, you may remember your employer handing over a W-4 form along with the pile of other paperwork to fill out. Your W-4 form determines how much tax is withheld from your income based on how many allowances you claim.
You can claim a certain number of allowances depending on your life situation.
Allowances conclude how little or how much your employer will withhold from your paychecks throughout the year for taxes. In other words, the size of your tax refund or tax due to the IRS after filing your taxes. You can claim as little as zero allowances or as many as apply to you and your tax situation. The ideal situation is to break even; no tax owed and no tax refund. How many allowances should you claim? The details to your specific situation such as your filing status, number of children, etc.
If your parents claim you: This is because your parents are claiming you as an exemption, rather than you claiming yourself. If you definitely want a refund, claim zero. However, you will have more tax withheld from each paycheck, meaning less take-home pay. Claiming two allowances will most likely get you the closest to your tax obligations, but when everything is said and done you may end up owing the IRS a small amount. If you work two jobs and are filing as single, ideally you would claim one allowance at each job.
If you want a larger refund when tax season rolls around, claim one allowance at one job and zero at the other. Claim two allowances if your spouse does not work. If your spouse does work, each of you should claim one allowance. For each additional child, add one allowance. You can claim additional allowances if your filing status is head of household. Your W-4 form may be the only leeway that the IRS gives you. Take advantage of that. You get to decide how much or how little you pay them throughout the year.
The actual total tax you pay does not change; just pay now or pay later. Some taxpayers actually prefer to pay more over the course of the year instead of getting more in their paychecks.