Claiming Exemptions—the W-4 for Dummies

w4 for dummies


I’ve been getting a lot of questions about how many exemptions to claim on the W-4 (Employee’s Withholding Allowance Certificate) form that you give to your employer.  People look at the whole 2 page form and get intimidated.  For most people—you should just ignore the rest and concentrate on the little part at the bottom of page one.  That’s the part in this screen shot up above.   It will make your life a whole lot easier.


First, some questions:


I claimed the wrong number of exemptions on my W-4 and now its tax time and I’m going to claim a different number of exemptions.  Will I get in trouble for this?

No you won’t.  Your employer doesn’t report you to the IRS for not claiming the right amount of allowances.  The worst that will happen is that you owe a lot at tax time or get a big refund.  (Actually I don’t think of getting a big refund as being a bad thing.  Probably shouldn’t call it a “worst case scenario.”)  Neither of those things are crimes.  It’s possible that the IRS could inform your employer to increase your withholding if the withholding on your W2 is not enough to cover your tax liability.  I have never seen that happen to anyone—but the IRS is allowed to do that if they think it’s necessary.


I don’t want any tax taken out of my paycheck.  Can I just claim EXEMPT?


No you can’t.  Exempt is only for people who will have no tax liability at all.  You might have gotten a refund last year, but it doesn’t mean you have no tax liability.  Generally, someone with no tax liability makes less than $5,950 for the entire year.    For most people, claiming EXEMPT is a really bad idea.


Okay, so what should I claim? Good question.  Here’s my suggestion list.  See what category fits your best.


You are a student, either in high school or in college.  You’re not married and you don’t have kids.  Your parents are allowed to claim you on their tax return (you’re under 24 years old.)  SINGLE, ZERO ALLOWANCES

You’ve got a job, only one job, you’re living on your own, and you’re single.  SINGLE, ONE ALLOWANCE

Now if you have a child, add another allowance for each child.  For example, let’s say you’re single with 2 kids, you’d claim single 3 allowances; one allowance for you and one for each of the children.


Single like above but you’re working two different jobs, SINGLE, ZERO ALLOWANCES – because the two jobs kick you into a higher tax bracket than the withholding would show.


You’re married and only one person works:  MARRIED, TWO ALLOWANCES

You’re married and you both work—you’ll each have your own W-4 and they will be different


Spouse #1 with higher paying job—claim MARRIED and all the allowances for the family



Now this is a pretty simplified guide, but it’s much easier to understand than what is on the form.  I also find that people are less likely to get into tax trouble with my rules than when you follow the allowances worksheet.


If you want a really good, accurate calculator to figure your proper withholding, the IRS has one on their website.  The problem is, as I’m posting this—the calculator is down.    You can use this guide for now and you can always tweak your withholding later when it’s back up.  Here’s the link:

351 thoughts on “Claiming Exemptions—the W-4 for Dummies

  1. Hi Kisha,
    It’s absolutely fine that you only claimed 0 exemptions on your W4–it will help you get a bigger refund. Now, that’s fine, but if you want to have more money in you take home pay, then claim 2 exemptions. Your refund will be smaller, but you”ll have more money with each paycheck.
    Oh course you still get to claim your child on your tax return, it’s your child.

    Let me see if I can explain this in an understandable manner. It’s kind of complicated, even for me, and I do this stuff for a living. I hope this makes sense.

    1. The IRS wants us to “pay as we go”. That’s why we are supposed to withhold income taxes from our paychecks.

    2. Our income taxes are based on our personal situation: married or not, kids or not, other income, and all sorts of stuff. So Kisha, you and I could make exactly the same wage but have to pay different taxes because you’re single with a child and I’m married and my children are all grown up and out of the house.

    Are you with me so far? Okay.

    3. We have to make our best guess about how much to withhold. We do that with the W4 form that we give to our employers.

    And this is the whole weird thing. We’re GUESSING! Now granted, we guessing the best that we can, but unless you’re actually running the numbers and you have all the information you need, it’s still a guess. But we try to make the best guess that we can.

    So we’re never going to be exactly at zero. And lots of people don’t want to be at zero anyway. Some folks want a big refund, others like to end the year owing. We all have different opinions on that.

    4. The IRS doesn’t get the W4, that’s only for our employer to let them know how much we want to withhold. So I could claim 7 exemptions on my W4, even though I have no children to claim on my tax return. Now I would wind up owing tax because I didn’t withhold enough, but as long as I pay the tax by April 15th, I’m okay. Just like you’re claiming zero exemptions. You’ll have a bigger refund because you’ll be claiming your child on your tax return, that’s fine too.

    The bottom line is: the W4 is really just for our employer to know how much money to take out of our checks to pay our income tax.

    If I could, I would much rather say, take “$X out of each check for my tax. For me, it’s much easier for me to compute it that way. (But then, I’m a math geek.) The IRS thinks the W4 is easier for most people. But as you can see by the number of people who ask questions here, the W4 is not easier.

    I hope this helps explain it a little bit.

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