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
Hi Melissa,
I’m thinking that you’re going to want to change your withholding right away. It sounds to me like you’ll be claiming your son as a dependent on your return, so that would give you the head of household filing status. If you are paying for tuition (instead of him getting a free ride scholarship) you will probably be able to claim the college tax credit also. That could be worth up to $2500!
This things will be important for you to know when you go to the new IRS withholding estimator. Here’s a link: https://www.irs.gov/individuals/tax-withholding-estimator
They’re really improved it, so I think it’s much better now. The link I gave you will take you to a landing page, then you’ll scroll down to the middle and click on the blue bar that says “Tax Withholding Estimator.”
You’re going to want to have your most recent pay stub with you because you’ll need information from it. Normally, I’d say you’ll want your tax return also, but in your case, everything is probably different for you. That’s why I said you’ll be filing as head of household and claiming the college tax credit.
Give it a try. I really think it’s much better than the old version. And it should get you to where you need to be withholding.
Hi Jan,
I am very recently divorced and am wondering if I should change my withholdings right away?
I work 35 hrs./wk. for the school district and am currently on auto deposit, claiming married with 1 exemption.
I have one of my three children living with me. He is 19 and is in his first year of college.
My Ex has been out of the house since 12/26/2018, but had been paying the mortgage and bills, up until we sold our home and moved to a rental on 08/15/19. Which one of us could claim my son?
I will be receiving spousal support starting October 1st to add to my income.
Our divorce was final on 09/13/19.
From what I am seeing I should claim 2 and single?? (If I can claim my son)
Thank you for your time.
Hi Kita,
you should file as single with one exemption. That’s it. You want to get the max out of your paycheck, I get it. But you also don’t want to owe later. You’ve got back IRS debt to pay so you won’t have any forgiveness if you have a balance due. I’m sorry, that’s not the answer you want to hear, but you definitely want to withhold enough to pay your taxes.
Hello Jan, I hooe you can answer me this. I have been working for this company for 18 years as of 6/1/2019. I have not gotten a raise in pay since 6/2014. I am currently making 15.53. I am working on average 169-180 HR per 2 week pay period. Getting paid Bi-weekly. I am in need of money risk being behind on bills and i am always having bank fees due to overdrafting to pay bills. I want to know what i should be filing on W-4 and what I shoukd be filing with the state of MN so what should I claim for federal and state of MN. I am a single male with no dependents i have a manufactored home that needs home improvements and i owe the IRS 11k and state 1300 i am on payment plan with state 200 every check. I need help with saving money i want as much money back now from my check. If possible can we chat via email or phone
Hi Inger,
I always recommend claiming zero exemptions on a second job. And given those new tax rules – you should probably take a look at the IRS withholding calculator too.
Hi Stacy,
I would claim 0. I would not write “exempt” on line 7. Now, you might actually be exempt – because it’s your first job and all, but you’re safer if you don’t. My niece had a summer job where she sold tennis shoes. She did a really good job and wound up making more money than she expected. She wound up being really surprised the next April because she had to pay taxes. If you claim zero – your covered for your taxes, and if they take any money out of your pay, you’ll get it back. It’s kind of nice to get a little check in the spring. Good luck on your new job.
Hi Vanessa,
it depends. My gut reaction is: probably. But maybe not. Helpful, aren’t I?
Here’s the thing, it really depends upon how much you make. If your combined income is under $101,400 then you would claim 4 exemptions for each child and subtract some exemptions based on your spouse’s income – so, you could be right on target. If you make over that – then you would only get to claim 2 exemptions or less and then you’re really under-withholding.
My best suggestion for you, and frankly for any two income family, is to go to the IRS withholding calculator and run the numbers through there. I’m really worried that many people are going to be hit with balance dues in April because these new tables are just really hard to follow.
Sorry, it’s not an easy answer.
Hi, so my husband and I are both working and we have 3 kids under the age of 17. How many allowances should we be claiming. As of right now I have an allowance of 5 and he has an allowance of 9. I have the higher income. Are we claiming too many allowances?
Hi Jan! So I’m single, still live with my parents, and is claimed dependent by the them. This will be my first job ever so I want to make sure I do it right! Do I claim 1 for allowance or 0? Also do I need to write “exempt” on line 7?
hi , i work 2 jobs . i have 1 child at home still in h.s. one in college. what should i claim on my part time job? last year i owed because i didn’t have enough taxes taken out i think mainly from the second job i don’t want to owe or owe as much this year so i need to make a change
thanks
Hi Sean,
You’ll probably want to look at the worksheet again next year, but I think you should put down 4. One for you, one for filing jointly. Two for each of your children. Then subtract 2 since your wife works. That’s what I’m thinking.
If you want a more accurate W4 for this year, you can go to the IRS calculator after you’ve gotten a few pay checks and tweak your numbers a little, but I’m thinking 4 should be about right.
Hi TS,
Since you get to claim the children as the dependents, you actually are going to be filing as head of household, not married filing separate. So, you should check the single box, but make sure you take all of the deductions for your children.
Hi Liz,
It’s not fraud, it’s just that he’ll probably owe come tax time. Unless he has children that he gets to claim or something, I’m thinking he should only claim 2 at the most.
Hi Jan
I just recently got a new job so its hard to say exactly how much I will be making. It could be anywhere from 70k to 100k. Since its my first year I doubt it will be 100k right away so maybe closer to 70-80k. I am married with 2 kids. My wife works part time and sometimes only once or twice a month so she should make anywhere from 5-10k. I’m confused on how allowances to put in order to bring home the most I can from my checks. I’m not too concerned about a big refund, as long as I don’t end up owing anything.
I’m married. My husband and I have been living apart for 2 years. We have 6 children. The children live with me. My husband and I agree I will claim all the children as dependents. On my W4 should I check married or married with a higher withholding at single higher rate.
My fiancé files 6, has 1 job makes $30,000. Is this fraud?
Hi Sara,
It used to be that if you were still claimed as a dependent, you’d put zero exemptions because you wouldn’t get to claim an exemption on your tax return. But now, with the new tax law, I think you should put 1 exemption down. The reason being – nobody gets to claim exemptions on their tax return, so the withholding tables changed to reflect that. You’ll still get to claim a standard deduction (just like before) but the standard deduction is much larger. Claim 1 exemption on your W4 – I think that’s the smart thing to do. You’ll take home more money with your pay check.
Hi! I have already filled out y W-4 form for my new job, but before I turn it in I wanted to check with someone to make sure I did it right. My parents say I should’ve written a 1 on the allowances, but I wrote 0.
I am single, 18 years old, I live at home with my parents, I am not the head of the household, and I am a dependent. I have no kids. I work one job.
How many allowances am I allowed to claim, if any? Do I enter a 1 for myself?
Any help is appreciated! Thank you!!
Hi Bridget,
It depends. Your SSDI will be taxed the same way regular social security may be taxed. If your husband’s income was low enough, it wouldn’t be taxed at all. But since he makes $30,000, then a portion of your SSDI will be taxed.
So yes, you will report the SSDI on your taxes. But how much will be taxed, and how much will it cost? Probably the easiest way to figure it is to do a fake tax return adding your SSDI income. You can go to the “Do Your Own Taxes” And run the numbers to see how much of your SSDI will be taxed.
Or, you can do the taxable social security worksheet by hand. The worksheet is kind of funky so I prefer to use the computer software.
Anyway, your taxable income will be your husband’s $30,000 plus the taxable portion of your SSDI. You’ll subtract $24000 from that to get your taxable income. My bests guess is that you’ll be in the 10% income tax bracket – so your tax should be 10% of your taxable income. You can look at your husband’s pay stub to see if his withholding will be enough or if you need to adjust it.
I hope that helps and wasn’t too geeky of an answer.
Hi Jamie,
Congratulations on your marriage! So here’s the thing, the new tax laws make the withholding a little crazy. A whole lot of the withholding questions revolve around how much you actually make. So the best thing is to go to the IRS withholding calculator. That will give you the best answer.
My guess – without knowing your numbers, is that you should probably claim zero exemptions. But really, I’m just guessing. The withholding calculator will be much more helpful.
Hi Chelsea,
With the new withholding schedules, I think you’re going to need to revise your W4s. I think you’ll both be claiming zero exemptions, and will probably need to have additional withholding taken out. The best way to get the right number for you both is to use the IRS withholding calculator
My quick and dirty calculation tells me that you should both claim zero exemptions and you should also have additional withholding to cover $6,370 in taxes. But you’ll get a much more accurate figure using the IRS calculator.
Hi Tom,
It depends upon how much she makes. If she makes less than $69,800 – than I’d say she should claim 10. If she makes more than that, but less than $175,550 – then she should probably claim 5. If she’s making over $175,550 but less than $200,000 – then claim 3. And if she’s making over $200,000 a year, then she should only claim 1 exemption.
Hi Rodrice,
you should be claiming one exemption on your W4, that’s it.
Hi R,
I’m thinking 6 is more like it.
Hi Clarissa,
it sounds to me like your employer is a jerk. Sorry, but it’s foolish to think that you can’t change the payroll withholding. My guess is that he had someone set up the payroll and he doesn’t know how to change it. That’s his job as an employer to figure that out for you. (In my opinion.)