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”

  1. Hi Kim,
    Yep, it’s confusing. When you’ve got conflicting information, use the IRS calculator.

    But here’s the thing – you’re looking at the IRS calculator in April, so you’ve got a few months of withholding already. So come January, I’m thinking that you might be able to go up to 19 because then you’ve got a full year of the withholding Oh dear, 19 sounds like so much, but that’s what the W4 worksheet has for you.

    I’d wait. Stick with the 13, file your 2018 taxes next year and see how you do. If it’s spot on, then you’re probably okay to move up to 19 for 2019. (Or may 16 – I’m kind of conservative.) But if you wind up owing for 2018, then don’t up your exemptions to 19.

    My guess is that you used the 2017 Turbo Tax calculator instead of the 2018 one.

  2. Hi Ams,
    Yep, I’ve even seen one guy claim 100. (I’m pretty sure that was too many exemptions.)
    Usually, when someone claims a whole bunch of exemptions, they have no federal income tax withheld.

  3. Hi Deb,
    For a teenager that is being claimed as a dependent on his parents’ return, he should claim zero exemptions. You’re absolutely right!

  6. Hi Crystal,
    If you would like a larger refund, then claim fewer exemptions. So maybe instead of 6, why not 4? I think that sounds good.

  7. Hi. I am married with two teenagers. I have just been approved for my SSDI and my husband works full time making approximately $30k annually. My older son also works and files his own return. My question is two-fold. Will I need to report my SSDI on my taxes and should my husband adjust his exemptions since I will be receiving the SSDI? Thank you.

  8. Hi Jan,
    I recently got married, my husband has a son that lives with us full time and my husband has claimed his son on his past taxes. We plan on filing our 2018 taxes jointly but I am unsure what to fill out on our w4, Can you please help?

  9. Hi Phyllis,
    The new W4 is different. And I’m afraid that I don’t have enough information to answer your question. Here’s a link to the new withholding calculator. I feel like I’m copping out on you here, but it’s the best advice I can give right now.

  11. Hi LaDonna,
    Your state wages should have been the same as your federal wages. Your withholding should be too low, but the wages should equal your federal. I think they should correct your W2.

  12. Hi Carly,
    Welcome to my life. Here in Missouri, most of us wind up owing state tax too when we do the same exemptions as on our federal. (Sometimes even if we claim no exemptions!) But New York is not Missouri so let me check it out.
    I’m not an expert on New York, so you might want to get a second opinion, but I took a look at the New York W4 form. And it’s a little weird. First, it’s 7 pages long! And the part where you put down your allowances (on page 1) says you have to figure it from line 18 which is on page 3. There’s nothing there for single! So I think in New York, if you’re single, you claim 0 allowances.
    Plus, you live in New York City and there’s an NYC tax so you’ll be claiming zero allowances for NYC also. I think that will take care of the problem.

  13. Hi Kisa,
    Congratulations on your marriage. Sadly, often when you get married, your taxes go up.
    Now, fist a little tax grammar. You’re using the word “return” instead of the word you mean which is “refund”. I apologize for the grammar police thing, it’s just that someone else might be reading this and get confused.
    So – normally your refund is a lot more when you were filing single. And there can be lots of reasons for that. The most likely reason is that but combining your incomes, you and your husband are in a higher tax bracket – so even though the married filing jointly tax rates are lower than they are for being single – your combined income is higher and you could get nailed.
    Another reason could be – although you withhold a lot – maybe your husband didn’t. And your refund was less because he would have owed if he filed separately.
    It could be one, the other, or a combination of both.
    The good thing is, your husband is claiming one exemption, and you are claiming zero exemptions, and you still got a refund. So that’s all good. But for planning purposes, your refunds in the future won’t be as large as they were before unless you increase your withholding (or have children – but that’s your decision, not something I’m suggesting. Having kids costs way more than any tax credit you can get!)

  14. Hi Lisa,
    Congratulations on your retirement. Since your husband is the only one working right now, I would have him file as married with 3 exemptions. Claim 2 if you want to be cautious.

  15. What if I live with my parents and they claim me. I am a student and make about 6 grand a year. What should I put on my W4

  16. Hi Jan. How many allowances can I claim when my husband is not employed, I work full-time and we have 4 children? Your help would be greatly appreciated.

  17. Hi Jan so I am married but since my husband has been incarcerated 2 years I was told file single hoh tricky part is on my w4 i don’t know what to put so im single head of household 4 kids and my oldest is 17 with her first part time job how do i file.

  20. Hi Amaryllis,
    with the new tax law, it really depends upon how much you make. Also, since you have two incomes, it’s a really good idea to use the IRS withholding calculator.

    I know that sounds like a cop out – but the rules are pretty funky. For the child tax credit, claim 4 exemptions per child if you make less than $101,401. Claim 2 per child if you make over that but less than $339,000. One if you make over that but less than $400,000.

    Of course, the numbers are all different if you’re single. And then there’s a whole other section for subtracting out your exemptions based on how much your spouse makes.

    So – the IRS calculator is actually easier.

  22. Hi Rome,
    Something seems off. If she worked all year and claimed 2 exemptions, owing $7000 seems a bit high. My gut tells me that she would have had more taken out than $300. $300 is about 2 weeks worth of withholding for that salary. If she had claimed 2 and they withheld correctly, she wouldn’t be owing hardly anything – if anything at all. It sounds more like she withheld for 20, not 2.

    So, maybe someone at the payroll department made a mistake. And you can ask them to help you, but they probably won’t. I’ve seen it happen before. And the big question you’ll get is – why didn’t you look at your paycheck before and ask why we only took $2 out – or whatever? It’s your responsibility to monitor your paycheck.

    Now one client I worked with did get a nice apology – but no money. Another, I had to really fight with them because they were doing the withholding wrong and they didn’t know they were wrong and didn’t believe me. (Some places still do it by had and if you don’t do the formula right – well, it’s wrong!) I had to play math teacher. I think they only believed me in the end because my client wasn’t the only one with a tax problem.

    But can you sue the employer for messing up the withholding or anything like that? I’m sorry but no. It’s a lot of money to pay all at once. Your girlfriend can get an installment agreement to pay it off monthly.

  23. Hi Raymond,
    Congratulations on your baby! First, I want to know if you are absolutely sure that you will be claiming your child on your taxes for 2018. I ask this because you’re living with the parents – who may think they are claiming the baby. By rights – you are the father, and you should be claiming her, but you know how families can sometimes be.
    So – if you will be claiming your daughter on your tax return for 2018, then you can claim 5 exemptions. One for you, and 4 for her. This is because of the new tax law and the new child tax credit.
    If you aren’t 100% convinced that you will be claiming her on your return – ask yourself honestly – are you staying or bolting? If you bolt – no claiming the kid. I know that sounds harsh, but it’s a legit question If you might not be around next April – stick to claiming 1 exemption. But if this is serious and you’re sticking it out – then it makes sense to claim the 5 exemptions and use that extra money for things like diapers.

  24. I am married. My spouse and I both work and make around the same amount of money(which is not alot!!). We have a 20 year old son still living with us. Should i enter 3 for deductions? If I do that, what should my husband put as deductions? We seem to have to pay in every year. Thanks for your help!!

  25. I changed my exemptions to 6 from last Oct because I needed more on my paycheck and luckily had received a refund of almost $8000. AGI was about $109,000. I am married with 2 jobs (1 of them being military) and my spouse has 1 job (uber). We also bought a condo last summer. Should I continue to leave my exemptions at 6 or lower it? I know its about $800 that is not being withheld on my paycheck since I changed it and I don’t want to owe next year.

  26. Hi Jan!
    I have started a new job am two paychecks in — it’s the first time I’ve worked in a contingent/ hourly structure where I get paid weekly, and I want to make sure that I’m pretty balanced on my tax witholdings! I ended up doing “married but withhold at higher single rate” on my W4, and my husband still needs to change his. Right now I believe he has claimed only himself (1) on his current W4. My husband and I are currently making similar base salaries (100k for him, 114k for me), but due to his bonus potential he is going to be higher at EOY. In these last two checks I had about 31% in taxes taken out on my weekly paychecks, so I’m taking home $1507 from a $2200 check. According to your guide, should my husband claim “Married + 2” as he would be claiming both of us?

    Thanks so much for all your insight!

  27. I have a friend who is single with 3 children (13, 15, 17) and works one job. How many allowances should she claim?

  28. Hello Jan, I generally make a little over a 100k a year. I’m single and have 2 children that does not live with me. What exemptions should I be claiming so I don’t owe alot to the irs st the end of the year?

    Thanks
    Rodrice

  29. Is it possible as a single mother of 1 child to claim “8” under personal allowances. I am just thrown off by that.

  30. I want to change my w4 from exempt…. But my employer says he can’t that it’s locked and won’t change…. He says the only way to enter my new w4 is to fire me and rehire me…. Can someone explain why this is happening and what do I have to do to change my w4 from exempt……

  31. Hi! My husband and I are trying to adjust our exemptions and I’m so confused. My husband is the only income earner and we have four children. We have always claimed 2 on his W-4 and we have always received a significant return. However, we are trying to adjust our return so that we get our return/owe ratio as close to $0.00 as humanely possible. TurboTax’s calculator says to claim 10 (and we would still get close to $5000); the IRS calculator says to claim 13 (and we would still get about $2000); and the W-4 worksheet tells us to claim 19. How do I know which is accurate? All these different answers are very confusing.

  33. Hi. I have a minor teenage son (age 16). He goes to high school full time and has a part time after school job. We claim him as a dependent on our taxes. How should he fill out his w-4? Does he claim himself and put 1 in line A? Or should line A be 0? He’s not married, so line B is 0. He’s not head of the household, so line C is 0. Since he’s single, but has one job, should line D be 1? Line E is 0. He has no dependents, so line F would be 0. No other credits, so line G is 0. So would line H be 0? If line D is 1, then line H would be 1? This is the first job he’s had, so we’ve never had to fill out a w-4 form for him. Thank you!!

  34. Jan,

    I had a bit of a shock when I did my taxes this year and found out that I didn’t have any federal taxes withheld. Fortunately, I was able to get a small refund, but i can’t figure out where I screwed up my W4. It showed 6 exemptions. Here’s my stats: married, filing jointly, spouse does not work, one child with now child care expenses. Projected income of 33,000, standard deduction

    i’m looking to over pay as little as possible, while making sure that I pay enough. I would like for my refund to be less than 500.

    Thanks

  36. I am single with one child and I plan on claiming head of household next tax season. According to the worksheet I should claim 6 exemptions on my w4. I would rather receive a larger tax return next year than withhold too little and have to pay. Should I claim 4 or fewer exemptions instead?

  37. we received new w 4 today . I have to fill them out today . My husband and I both work and make 140000.00 a year. I know to put 0 deductions and take out at single rate . I don’t know if I need to take out more. ? I usually take out 100 dollar more.

  39. I filed a w4 exempt on the state part of my w4 for on a part time job for 10 months. The other 2 months were a normal w4. My mistake I should have filed married and 2. When I received my w2 the fed wages were what I had earned but the state wage box 16 was only for the amount for 2 months earnings.. Is this correct??

  40. Hi – I am single, 29, no children/dependents, with 1 job in NYC. I pay student loans (graduated 2010). On my W4, I have 1 federal and 1 state allowance. Is this too many? Should I have 1 total rather than 2? I know having less allowances means more taxes come out over the year and I get a higher return. But I also thought 2 was completely normal.

    But last year I owed state taxes ($1300!) and I had no idea why. And this year, I am being told I owe $1600. I am super confused because I thought I had my W4 correct and was paying ample fed and state taxes on each paycheck. Please help! H&R block and TurboTax are both telling me the same thing but I have NO clue why this is happening. The federal return is ok – ~$600 both years, but why am I owing so much for state?

  41. Hi,

    My husband and I got married last year and this is our first year filing together. I claim 0 on my tax exempt and he claims 1. Our tax return was 50% less than when I filed as single. I’m a little confused because I thought when filing as a joint married couple you received a married credit which bumped up your tax return.

    My question is since my husbands tax exempt was 1 and mine 0, did this lower our tax return?

  42. I recently retired and I can not collect my pension for 8 more years. We have always claimed married and single exempts. What should I claim now? My husband will be the only working person now and bringing home income.

  43. I need more each paycheck so I’m claiming 3 allowances (me,spouse,child) but my spouse’s income is double my income but he claims 0 withhold at single rate. How bad would this affect what we owe or refund at end of year?

  44. What about if married both of us work and have 2 kids. How many dependents should i put?

  45. Hi, I’m married but my husband and I are separated (not legally separated). What would you recommend that I claim on my W-4?

  46. My gf made a mistake and claims “2” for what appears to be all of 2017. She paid $300 in federal tax all year on a salary of $62k. It looks like she has to pay $7k in taxes now.

    Is there anything we can do?

  47. Hello Jan ,
    I’ve got a quick question I’ve recently been claiming just myself on my w4, but in November 2017 I had my first child. I’m not the head of the household I’ve been staying with my gf and her parents house I’m the main provider for her and my newborn son but we’re not married. She’s currently finishing college so I’m the only income at the moment, I’m making about 18,000 a year. Should I claim 2 or more? I want to make sure I don’t get too much taxes taken out each paycheck, but I want a good tax return. What’s your advice on that?

  48. Hi Jennifer,
    Quick answer – I’d change the W4 to married but withhold at the higher single rate with 1 exemption.

    The long answer – do you file jointly? Why is it you who winds up owing and not him? Just sayin’, it seems you’re doing this as a team right? So I want to emphasize the “team” effort here. What happens when both spouses work is that the first spouse uses up all of the lower tax brackets. Then the second spouse winds up being taxed at the higher tax brackets. But, you’re filing jointly, you’re working together. It’s all for the good of the joint family unit.

    So as long as you recognize that, right? Then it’s all good.

    But – if you’re not a good family unit. If there’s an issue there, then why does he get all the lower tax bracket stuff, and what makes you in the wrong? I suspect you’re a good family unit and working together. But I just wanted to mention that in case someone else was reading this post. If you’re dealing with a bad situation, then forcing you to be the one who loses out on the income could be a mistake.

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