Claiming Exemptions—the W-4 for Dummies

Posted on: 02/1/13 1,025 Comments

w4 for dummies

NOTE FOR 2018:   The Tax Cuts and Jobs Act that was recently passed by Congress is going to change the IRS withholding tables and how we fill out W4s.  Right now, we are still waiting for the IRS to supply the new withholding tables and create the new W4s.  This post is about the old W4.  I will be updating this as soon as I have new information.  But right now, the information below is for 2017 and earlier.  I do not expect the new information to be available until mid February.

-Jan

 

 

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

 

Spouse #2 with the lower paying job—claim MARRIED BUT WITHHOLD AT HIGHER SINGLE RATE, ZERO ALLOWANCES


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:  http://www.irs.gov/Individuals/IRS-Withholding-Calculator

1,025 thoughts on “Claiming Exemptions—the W-4 for Dummies”

  4. Hi Kristi,
    I’ve never won on one of these. The bottom line is that your husband should have monitored his paystubs and when he noticed that the withholding was wrong, he should have notified HR.

    Now – being real, how would he know, right? But that’s going to be the argument you get. Now, if you can prove that your husband really did claim o exemptions and that HR was in the wrong – they may feel bad and try to help you – but I wouldn’t count on it.

    But as my husband always says, if you don’t ask, you don’t get.

    In the meantime – make sure that your husband’s HR department fixes his withholding for 2017 so you don’t get hurt next year. Sorry I wasn’t much help.

  5. Hi Jan,

    Question: Both my husband and I have jobs and we’ve been filing “married, filing separately.” During this time, I’ve been taking all the itemized deductions because he always owed more. Apparently, my tax situation changed to Married, 3 exempt. and it did not withhold enough for the year. Not sure what happened. How do I rectify this since my husband makes more than I do?

  6. HI,

    So I have had my exemptions at 2 for quite some time at my place of employment. It just hit me (after already filing!) that my wife’s involvement selling mary kay might be reason to change this.
    This year we filed Jointly with 1 dependent. I made roughly 77k. Along with our child, we had some deductions surrounding the purchase of our new home (mortgage interest, property taxes). After deducting my wife’s business expenses she earned roughly 3,500k, MK is her only work. We ended up with a rather large return totaling rounghly 9k. I guess my question is, am I on the right track with the way I’m withholding?

  7. Hello, I am in the process of filing my taxes now and I am confused as to why I owe state taxes. I file single and my exemptions are zero for federal and state yet my software is saying I owe the state of MD. What could be the reasons behind this?

  8. Hi, my husband and I are trying to figure out how to not have a tax liability for 2017. On my w4, I claim just two allowances and married as we have one child. Our AGI was $140k. On his W4 he has 0 allowances and married. We have a huge tax bill of $3k. I really don’t want to reduce my allowance because we need the extra disposable income. Would I have to go 0 allowance also to avoid this tax bill? We are in that weird tax bracket that I despise.

  9. Can i claim my children on my w4 for the year and then claim them on my taxes when I file? Or is that double claiming and will I get in trouble?

  10. I have two kids. Will i get more refund if i claim both or should i let my ex-spouse claim one because she said i get more if we split one

  11. Hi, I am looking for some help filling out my W4. I am a single mom, 1 child, working 1 job. From May to the end of Aug I worked for a company through a temp agency, then that company hired me on permanently full time from the end of Aug 2016 to present. I found out that from Aug to Dec they weren’t taking out federal taxes. Well they only took out $24.25 in fed taxes because HR said I marked 7 exemptions. I already filed my 2016 taxes and I actually got quite a big refund. I was not expecting to get that much and owe. So, HR gave me a new W4 & I am trying to figure how many allowances I should put down. I calculated 4:

    1 for being able to claim myself
    1 for being single & having only 1 job
    1 for the # of dependents I have
    1 if I have $2000 of child or dependent care expenses (I pay daycare expenses)

    Is 4 too many, too little, or just right for me?

    Thanks in advance

  12. Hi ,

    Am married with no kids and only 1 job. As per the W4 form in IRS ( Line A,B,C ) it says allowances can be 3. And so I kept the same. But while speaking with tax consultant yesterday he mentioned I should have been claiming only 2 ( 1 for myself & 1 for my spouse ) and so he mentioned I would have to owe money to IRS.

    Am I missing something here? Did I just screw myself?

    Awaiting your respone.

    Thanks,
    Krishna

  13. Hi Jan, I just moved to the US, how many allowances can I claim if:

    – I’m married and and my wife does not work.
    – One three year old child.
    – Planning to save on the 401k.

  14. I’m married, no children. I work part time as well as my husband. Do we claim one exemption or two in order to have the most monthly amount to live on?

  15. Hi my husband claimed 0 on his w4. However his company put down 2 dependents now we have to pay into taxes. Is there a way for us to get our money back due to his hr filing wrong?

  16. Im in california and i claimed 10 dependeds all year on accident and i made 35000 for the year….will i owe money this year??

  18. Hello. We want our money back in the paychecks instead of a huge lump sum that we get at tax time. My husband works, I do not. He makes around $65000. We have 3 children right now with a 4th due in a few months. My husband just changed his w4 to include the kids. He did not claim me on the w4 because we do not want to owe anything. I will have him change his w4 to add one more once this child is born. But should he claim me as well? If he does will we end up oweing taxes in the next year or will we be okay? The only other thing that comes out of his paycheck is what he pays into his 401K. I am hoping you can give me some advice!

  19. Hi Jan,
    How many allowances should I claim? We just move to the US. My wife is not allowed to work (TD visa), we have one child and I just have one job. We are going to send our child to day care
    Thanks

  20. I filed too many exemptions (3 and I’m single, not a student and worked one job) on my w4 and now I owe on my return.. Is it fixable or am I for a lack of a better term s.o.l.?

  21. Hi Cole,
    Does your child live with you? If yes, then I would claim 4 or 5. (I prefer 4, I like a little refund.) If your child does not live with you, I would claim 2.

  22. Hi Haley,
    The best thing for you is to go have your taxes professionally prepared. You and your boyfriend cannot file jointly for starters. Go talk to a real live person with your boyfriend. Work together to do what’s best for your family. There are some moving parts in your situation and if you all work together you can come up with the best overall plan. Sorry, I know this sounds like a brush off, but seriously I think you’re going to want a little more help than a quick online type answer.

  23. Hi Rachel,
    If you owe money it will just need to be paid with your tax return. If you worked the jobs at different times – then you should be fine. If you were working more than one job at a time, then you might owe. Wait til you get all of your W2s, file your taxes and see where you stand. If you owe, then change the W4s at your current jobs.

  24. Hi Ashley,
    At this point, you should just do your taxes. If you’re satisfied with how things turn out – then your withholding is right. If you’re not happy – make a change. You’ve got everything you need in your hands to make the right decision.

  25. Hi Veronica,
    I would have your husband claim married with 4 exemptions and you should claim single with zero exemptions. Or go to the IRS withholding calculator and try that out.

  26. Hi MaryEllen,
    At this point, you should just do your taxes and see what you’re stuck with. I can’t figure out the answer from what you’ve told me. Sorry.

  27. Hi Kayla,
    On your W4 – single with one child and one job and you are claiming your child on your tax return, you should be able to claim 6 exemptions – so it sounds like you are fine. I tend to be more conservative because there’s “always something” so I usually recommend claiming slightly fewer exemptions. But unless your child’s father is claiming the exemption, you should be okay. (If he gets the exemption, then you’ll want to reduce yours.)

  28. I’m single with one child… should I claim 2 or 3? I’m looking to get more back on my paycheck during the year and only a small refund…?

  29. I believe I as week messed up on my w4 form… I put 1 on line a.
    I put 0 on lines c,d,e and line 5 i put 2. My boyfriend and I file jointly so I was told to put married and we have a don together …his form is 1 and 0…am I gonna owe and what’s the best way for me to file if I did screw up?

  30. Hi Jan, I’m in a pickle. Over the course of 2016 I worked in 5 different jobs. So I’ve recieved 3 of 5 W2’s and I noticed that one of them had not taken out federal taxes. I checked my paystub for the current job that I have (which I started in October of 2016) and they aren’t taking out federal taxes either. So looking at my W4 for my current job, it says I have 4 allowances:
    -No one else can claim me as a dependent
    -I’m filing Head of Household
    -I claim someone (my mother) as a dependent
    -My wages from my second job are $1,500 or less

    When I got this job I was working at another place (I had started there first) and so I must have checked off the other section about my second job because I thought it meant that the pay from my second job was less that $1,500 a MONTH not in a year (is that correct?) and it was the same with my other job that also had no federal taxes taken out.

    My question is, how do I amend this and why didn’t it take out federal taxes? Will I get audited or will it just take it out of my tax return?

  31. Hi Jan,

    I am just reviewing my W2 for the year and not sure that I actually claimed the correct number. I am filing single, and claiming my 1 son. I have 1 job and work fulltime. When i am looking at my electronic W2 I show that it says I am claiming 5? I have no idea why! Will this affect my return at all? What should i actually be claiming?

  32. Hello,

    im not sure how to fill out my W4, you would think after doing taxes for so many years i would have it down. this is going to be the 1st year my husband and i will claim 2 kids. We did an estimate and we were bummed out by the amount we are getting refund. We both claimed married but withold at a higher rate. Then i came to realize its only money the IRS is keeping 🙁 how do i get a claim my W4. my husband makes more money that i do. PLEASE HELP! SOS!

    THANK YOU

  33. Hello, I believe I messed up on filing my w4 as my w2 shows no refund for federal income tax. I believe I put 1 but accidently wrote exempt not realizing what it meant. What percentage of my income am I likely to have to pay back in taxes?

  34. Hi I think I messed up my w-4. I’m single with 1 child and 1 job. I claimed head of household. And I think I put down child credit which I don’t think I was supposed to do right? That part confused me and now I think I screwed myself

  35. Hi Caitlin,
    Claiming single with zero exemptions should give you a little refund. Claiming 1 should get you to a zero balance due and no refund.

  36. Hi Luis,
    I like 5 exemptions. You could probably go up to 7 but if you’re used to getting big refunds, having a little bit of a refund would still be kind of nice.

  37. Hi John,
    So the worst case scenario is that you’re going to owe some taxes. Just pay them. (I know, easier said than done.) Do you taxes, and figure out what you owe. My gut says it will be about $70 bucks, (assuming that you’re single and can claim your own exemption) but I really don’t know – there may be all sorts of other stuff I don’t know about. If you do owe more than that, you don’t have to pay until April 15th so you’ll have some time to save up.

  38. I have my first real, full time job this year, and I think I messed up pretty bad on my W4.
    I put:

    Current Federal Withholding:
    Marital Status: Single
    Number of Allowances: 0
    Additional Amt Withheld:

    Section 3
    Current Maryland Withholding:
    Marital Status: Single
    Number of exemptions:
    Additional Amt Withheld:
    CURRENTLY CLAIMING EXEMPT

    I’m now doing my taxes and I’m realizing I think I messed up and they didn’t take out MD state taxes and now I owe. I know I need to fix my W4 probably but don’t know what to do. My mother always says claim 0 but I am not married (living with my fiance, we do not share any banks accounts or anything) no children, 1 job.

    I need help

  39. Hi Brando,
    It depends. I’m thinking that you don’t get to claim your 2 children that you pay child support for on your tax return. Do you claim your wife’s children on your taxes? Or are they claimed by her ex? It’s really about how many children you are allowed to claim on your return. I’d claim 1 exemption for you, another for your wife, another for your filing status, so that’s three. If you are allowed to claim your wife’s children on your tax return, then I’d add them for 5 – and claim married.

  40. Married with 3 kids. How many exemptions should I claim? Right now I claim zero and we get a big tax return, but we’d rather have more money through out the year.

  41. I did my W-4 wrong and I claimed exempt, I later found out that i shouldn’t have. What can I do or what should I do to keep from getting in trouble with the IRS when I file my taxes at the end of the year?, because my job withheld no taxes from my checks do to my error, although I only made $11,000 on a part time job.

  42. I’m married but pay child support for 2 children my wife and her 2 kids we all live in the same house my wife doesn’t work so should I claim s-5 or m-5 we live in Oklahoma and my kids live in San Diego

  43. Hi Jazzy,
    Okay so you and your partner are not married. But you are both the parents of both children, right? If not, then you can each only claim your biological children. So, here’s what you do. You run the numbers a couple of ways and see what gives you the highest total refund (or lowest tax owed.)

    Scenario 1: Jazzy HH with 2 children Partner Single 0 children

    Scenario 2: Jazzy HH with 1 child Partner Single with 1 child

    Scenario 3: Jazzy Single with 1 child Partner HH with 1 child

    Scenario 4: Jazzy Single with 0 child Partner HH with 2 children

    When you’re using tax software, it’s pretty easy. I’m assuming of course that you and your partner are in a committed relationship and you’re working together to the highest and best for your family.

  44. My partner is in a higher tax bracket then I am. Which brings me to my question…. Should I claim both kids or should he claim both kids?? Trying to see if there’s a difference in either situation? We both take care of the kids equally

  47. Hi Brian,
    If you are claiming all 4 exemptions, then your wife should claim single with zero exemptions on her W4. Or, you could claim fewer exemptions. Reduce your exemptions by 1 for each thousand dollars of income tax you owe. (It’s not a perfect formula, but it’s not bad.)

  48. Hi Esperanto,
    It’s tax time. Do your taxes, see how you come out. If you have a big refund, I’d claim more exemptions. If you owe, claim fewer.

  49. Hi Anastasia,
    Your commission pay probably is getting taxed at a different rate. Your regular salary is paid what – every two weeks? Or may once a month? But your commissions come every two months, but the checks are probably still taxed like it’s a bi-weekly check. In essence – it is taxed at a different rate – so it makes your pay a little weird.
    I used to have a job with a commission and a base – I had the weird tax problem too. I settled it by figuring my annual income, and figuring the tax and just withholding all of my tax from my weekly pay but then getting all of my commission in that check. (Of course, it made my regular pay check almost nothing, but the commissions were great!)
    But Anastasia, you said you are single with no children – so why are you claiming head of household? That designation is for a single parent. You should only claim 2 exemptions. That’s where you should be.

  50. Hi Jan,

    I am married with 1 child. We file as married jointly. I claim my wife and child as dependents on my W4 because I make more, so I end up with 4 exemptions. My question is how many exemptions should my wife take ? Right now hers is set at 1 ( Line A – enter 1 for yourself ) but we always end owning when I enter her stuff into the tax program

    Thanks – Brian

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