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 I’m 22 years old and just got a part time seasonal job for the summer and when filling out my w4’s I claimed 0. My parents still claim me but I’m wondering if I should change it to 1 or keep it at 0? What would you suggest to do and can I still change it? Thanks!
Dear Student/Mom/Employee,
It’s hard to tell. I would send you to the IRS withholding calculator, but to be honest, your circumstances might not give you the best answer. Here’s the link anyway: http://www.irs.gov/Individuals/IRS-Withholding-Calculator
I think that you’re smart to file your taxes at the same time to make sure that whatever you are claiming all works out. I’m assuming that either you or your boyfriend are claiming your child–but you may have the option of allowing your mother to claim the child if she makes more than you and your boyfriend in 2015. (It’s an option only. Not something you have to do.)
Since you’re not married, either you or your boyfriend could claim your child. It would depend on who would qualify for the most EIC. And it might even be possible for your mom to claim you – even though you’re working, since you’re a college student.
(Full disclosure here, it sounds like a pain in the behind for you and I’m thinking “Oh, this sounds fun!”)
My safety suggestion is: have everybody claim single and 1 exemption. I call that the safety filing because nobody is going to suffer too much if anything goes wrong. There’s enough withholding and no one should get burned if relationships go sour, etc.
If you want to maximize current income, and still play it fairly safe, I would have you – student/mom/employee – claim 3 exemptions, and boyfriend still claim only 1. Even if you wind up having him claim the child, he can pay any tax you owe with the refund he gets from claiming your child.
But remember, I’m shooting from the hip here. It’s not scientific or anything. You might even be able to claim more exemptions, but I like to be more conservative when it comes to withholding.
Hi Yo,
You are not head of household in the eyes of the IRS. You are single. Your boyfriend is single. You should each claim one exemption.
Now, after you file your 2015 tax return, if you have a large refund, then I would adjust it to account for the fact that you’ve got a mortgage and real estate taxes. But a first year home owner is wise to keep her exemptions the same as what they were before buying the house. Often, the first year of home ownership doesn’t have the tax impact the realtor told you it would. So it’s better to be safe than sorry.
Hi Dave,
(Sorry I’ve got you out of order here.) You’ve been claiming zero exemptions and you’ve got a non-working wife and some kids. Your refund has been getting smaller because your oldest child has aged out of the $1000 child tax credit. Your 16 year old will age out this year. (It ends at 17.)
There’s nothing you’re doing wrong, the kids are growing up. Now if the 18 year old goes to college in 2015, then you’ve got a chance at qualifying for the American Opportunity Tax credit. It’s worth up to $2500. (No–it doesn’t make up for how much tuition costs, but it sure helps.)
But if you’re looking for a big refund, you’re already doing the right thing by claiming zero exemptions. You could withhold more, but I think you’d be better off taking whatever extra you’d withhold and sticking in a bank account – but that’s my opinion. You do what makes the most sense for you.
Hi Ewa,
Most likely, you’re going to be fine claiming 2 exemptions. You can always try the IRS withholding calculator, but claiming 2 should be just fine for you.
Hello,
I had a child in August of 2014. I live with my boyfriend and we share an apartment with my mom. We pay rent for our own room and do not depend on my mom or his parents for anything. I will be 21 this month and am a full time college student. I work 20 hrs a week during the semester and 40 hrs a week during the summer/winter break. He works full time and does not go to school so he makes more money than me (he makes the same as my mom). He is authorized to work under DACA. How many allowances should I claim. How many should he claim? Last year I made more money than him as he didn’t work for the majority of the year and when he did he was paid in cash so I claimed our son as a dependent. We didn’t have any issues. My mom and I filed our taxes at the same place so our applications wouldn’t have any discrepancies. I will be starting a new job in June and want to fill out my w4 correctly. Thanks!
Hi Sheela,
it’s so hard to comment on that without any additional information. Basically though, if your refund was $1000 or more, then I think you’re okay. If your refund was less, then you might want to reconsider. But that’s a really,really rough guideline. Your best bet is to use the IRS withholding calculator.
Hi,
I recently bought a house, I’m single and head of household. Boyfriend lives with me and he helps with half of everything. Should I put Single and 3 allowances? One for myself, single and head of household ?
Also what should my boyfriend put if he is not the head of household ? Single and 1 allowance for himself?
Yoana
Hi Jan,
I am a single mom of one living with my parents and looking to move out soon since I will be starting a new job which will bring me up to 73K. My daughter lives with me and I pay for her expenses and medical insurance, i do get help from her father every 2 weeks. I wanted to know what would be the optimal number fo allowances to claim in order to get the most out of my check and still get a little something from the tax return. At my current job i claim 1, should i still claim one or two for both her and i?
Thank you in advance,
Ewa
Hi, I am getting a refund this year. I claim head of household and am a single mom.
I am going to change the number of claimants from 7 to 8 on my W4. Any thoughts.
Thanks
Sheela
Hello,
I have a wife and five children (18, 16, 11, 9 and 4).
I’ve been claiming zero exemptions on my fed taxes (TX is my home of record, so no state tax).
I have an 18 year old still living at home, working part time, starting college.
I make around $75K annually, no other income, no investments, spouse does not work.
I noticed that my return is getting smaller each year: should I consider changing what I am claiming and/or anything else on my taxes for next year, in order to maximize my potential return?
Any advise is appreciated; thanks.
V/R
Dave
Hi Jessica,
If you find that you owe this year, switch your exemptions down to 1 (or zero if necessary.)
People claim exemptions for things besides kids, like a mortgage or other deductions. If you don’t owe, there’s no problem. If you owe, then adjust your W4 for 2015. That’s all.
Hi Brittany,
You’re not the first person that’s happened to and you’re certainly not going to be the last. Here’s the part you’re not going to like–the IRS doesn’t care. I’m sorry.
Now, if it’s really the employer’s fault, some employers try to help you with that. But many won’t. Now, here’s my question-why didn’t you look at your pay stub?
You see, when you got your very first pay check, didn’t you notice that they didn’t take an extra $15 out? Seriously. You got extra money to take home all year long and you never once looked at your pay stub? Not once?
If you had, back then, you could have said something to your employer and they could have fixed it. But since you didn’t, how can you blame them for a whole year of bad withholdling.
Sorry, but some of the blame is on you and you’re going to have to pay your taxes.
Hi Tim,
It makes sense to claim your exemptions on your retirement income. If you have other income in addition to your retirement money, you should go to the IRS withhodling calculator. If you don’t, you can use the same number of exemptions that you’ve been using since that seems to work for you.
Hi AJ,
I’m guessing that claiming 5 exemptions is keeping any federal tax from being withheld. My gut says 3 at the most, but if you qualify for EIC, then maybe you donn’t need that much. Go check out the withholding calculator on the IRS website to be sure.
Hi James,
It sounds to me like you’re single with one exemption.
Hi Ashleigh,
Since the baby will be born in 2015 you can go ahead and adjust your withholding now. The best is to use the withholding estimator on the IRS website, but I think you claiming Married with 3 and him claiming Single with zero might be pretty close.
Hi I found out that I have two exemptions on my w4 but I don’t have kids it has to be a typo.. how do I fix this is it too late? It’s causing problems when I try to prepare my taxes
Hi I’m brittney, I was wondering what can I do about this, I been on my job for about a year and when I filled my w4 out I had out $15 I wanted to be taken out every week out of my paycheck. So anyway when I got my w2 form back a few weeks ago I seen that they had put that I had 15 for my exemptions, which I did not, so no taxes at all we’re taken out for the whole year of 2014, so now I’m a have to pay that which is not fair because of their mishap and I’ve approached about this matter and they are not doing anything about it and say it’s nothing they can do. Thats ludicrous when they filed my paperwork wrong in the first place and didn’t pay attention to detail!! It’s their fault they should be able to do something, I shouldn’t have to get penalized for it.
What can I do, How else can I go about this?
Hello, I am a divorced father of 3, my kids live with me all year, so I claim head of household with 3 dependents every year on my taxes. I just retired from the military and am currently looking for a job. Started getting my retirement check from the military and noticed I am showing 0 exemptions for fed taxes..I would definitely like to get a little more in my check every month so could I not claim at least 1 if not 2 or 3? Obviously I still want to make sure I pay enough into taxes, it would just be nice to get a little more take home every month…
I filled out a W-4 for my new job and noticed that federal was not being taken out. I have 5 on line H. I’m a single mother of 1 child and have been filing head of household. What did I do wrong?
Hello, I’m updating my w-4 to allow me to get more out of each paycheck since like most I’m living paycheck to paycheck 🙁 And now with the added cost of the health care it really hit me in the pocket. I’m single, 42 and rent my house, trying to figure out what allowances to claim? Claim myself, single or head of household or all 3? so confused, want to get more in my check to make up for the health care cost since my allowances are 0 now, hoping to increase my check up a bit again but really don’t want to owe at the end of the year either.
thank you
James
Hello Jan
Needing some advice on how my husband and I should fill out our w4s!
We are both working — I have the higher income, his is a little lower. We have a baby on the way. Until the baby comes I feel like I should be MARRIED and 2. And he should be Married, but withheld at a higher single rate and O. When the baby comes, should he keep his the same, and I then change mine to MARRIED and 3?
We prefer to have our taxes break even: getting the most out of our paycheck now, without having to pay the IRS come tax season.
Thanks for the help!
Hi Lajuan,
That’s not a dumb question at all.
When I use the “higher earning spouse” vs “lower earning spouse” I’m assuming that the money is shared between them and all is good. But, if money isn’t always a “comfortable” subject, maybe the lower earning spouse does want more of her income. And it would be fairer for her to keep more of it.
But it’s just easier to figure it that way I said it.
You can refigure the exemptions any way you want so long as you withhold enough taxes together. (Once again I’m going to point to the IRS withholding calculator.)
You don’t have to have the lower earning spouse claim zero–it’s just the easier solution. But it’s not the only solution.
Hi Casey,
go to the IRS withholding calculator. Use your pay stubs and your tax return and it will help you calculate your W4 to get your refund to zero. If you want a bigger refund, claim fewer exemptions than what the calculator tells you to claim.
Hi Marcella,
I’m guessing that you paid less because you were withholding as married and he withheld as single. (That’s my guess.)
Because your incomes kick you into a higher tax bracket, you should probably both claim withholding as single zero. But the best thing is to go to the IRS withholding calculator and you’ll get a really good number instead of a guess.
Why is it that the spouse with the higher paying job is the one to claim all the exemptions? Wouldn’t the spouse with the lower income want the exemptions to get a bigger paycheck? Sorry for the dumb questions.
sorry I meant to mention that I claim 0 also
I am married we file joint with 3 kids all under 18. One going to daycare. We both have jobs. We have been getting back around $4,000 every year. I think he claims 2 or 3 dependents. I claim ) married at high single rate. How could we change it on mine so I get a ftter paycheck, but still get a good refund? We make $66,000 together
My husband and I both claim 0 for our allowances on taxes. I actually made more than him in 2014 by about 2,000, but paid into federal taxes much less, about 5,000. How and why would that happen? We both only work 1 job and we are having to pay in for our taxes when both claiming 0??
Hi Jennifer,
You’e the perfect example of what happens when you have three jobs. Each job is doing your withholding based upon you only having the one job. But, combined, your income puts you in a higher tax bracket. But you’re only withholdling for the lower tax bracket. I bet you got hit with a nasty balance due surprise.
Once again, I’m going to suggest the IRS withholding calculator. In your case, you’re probably going to need to withhold at the single, zero rate plus have extra taken out to cover your taxes. The IRS calculator will give you accurate numbers.
Hi Sandy,
It all depends upon what kind of retirement income he’s getting and how much withholding he’s going to have. I would do the IRS withholding calculator. Use your last pay stub and his retirement paystub. Make sure you include the social security income too. That will give you a good number to work with as far as your withholding.
Hi Ann,
Yes, they can. It’s a little bit of overkill. You could figure out how many exemptions to claim for the employee to have zero state withholding, but I’m pretty sure 99 exemptions would do the trick.
You might want to remind him that he will wind up having to pay the state eventually though if he doesn’t withhold enough.
Hi Confused,
I can’t tell how your tax return will turn out. But–for what it’s worth, if you claim one exemption, and that’s your only job, and you’re not a teenager being claimed by your parents, you’re probably just fine.
Claiming one exemption means that you’re claiming yourself as an exemption on your tax return and no one else. Usually, if that’s the case, and that’s your only job, and you’re claiming the standard deduction, you should break even on your tax return
If you have lots of deductions, or claim kids, then you’ll probably have a refund.
If you have multiple jobs at the same time, you could still wind up owing because they’re only withholding based on the lower income.
I always claim zero exemptions for the state on my W4 because I always seem to owe the state if I don’t do that. (But my taxes will be different from yous–it’s just what I do for me.)
Bottom line, if you tax return seems fair and balanced, keep your exemptions the way you’ve got them now. If your refund was too large–then increase your exemptions. If your refund was too small, or you owed–then decrease your exemptions. (Or, in the case of your state where you claimed zero exemptions, you can always ask to withhold a little extra.)
Hello my name is Jennifer and I have three jobs. I got my W-2 for all three and when I do them separately it shows I recieve money back but when I put them all together it states I owe sooo much money. I don’t understand why please help.
I am married and am claiming married but at single rate. Now that my husband is retired should i change this to married?
Quick question. As an employer, can an employee file with 99 allowances to avoid state taxes coming out. Not filing “exempt” but with 99 allowances?
Hi,
As I am looking at my W2 for a job I started on May of 2014, it seems I filed 1 for state and 0 for federal, what does this mean? Will I end up paying money back?
Hi Joel,
There’s a big difference between getting a big refund and having no tax liability. But, if you have been claiming exempt and still get a refund (child tax credit I’m guessing) then you’re okay. If you look at line 63 of your tax return and it’s zero–you’re okay.
Hi Worried,
Since you only claimed exempt on one paycheck and then fixed it, you should be fine. Don’t lose any sleep over it.
Hi Mariana,
You should have your W2s any day now. Just file your taxes and you’ll know for certain if you owe or not. That’s much better than me guessing without any numbers.
I have 4 kids and I started claiming exempt about 6 years ago because I was getting a refund every year. When I read my employer’s W4 form, it says ” I claim exemption from withholding for the year 2015 and I certify that I meet BOTH of the following conditions for exemption: 1. Last year I had a right to a refund of ALL Federal income tax withheld because I had NO tax liability and 2. This year I expect a refund of ALL Federal income tax withheld because I expect to have NO tax liability.” Because of my child tax credits and mortgage interest and charitable contributions, I end up getting a refund every year. I don’t want the IRS to hold my money all year long, just to get a larger refund. Is it okay that I am claiming exempt? Could I get into trouble with the IRS for this? Am I reading the verbiage correctly?
I am 21 years old and a college student. Ive been at a job where ive been working 30 plus hours a week getting paid 10 an hour. My mom does claim me. When the new year came I filled out a new w2 form and read the form wrong and wrote exempt on the form. when I received my first pay check after the new w2 form was summited I noticed that no federal taxes were taken out. I knew it was a mistake so I resubmitted another form that did not say exempt on it. Since It was only one pay check and I fixed the problem will I be liable to pay those taxes on this pay check when my mom and I file next year?
Hello,
I am 20 years old and am currently a college student, my mom will claim me. in 2014 I worked 3 different jobs, However during the summer I worked 2 jobs. Then I got a new job where I made more money so I quit and just worked at the new job. When I filled out my W2 form for my new job I made the mistake of putting 1 dependent. on my previous 2 jobs I put zero dependents. because I put 1 dependent on my new job, will this mean that we will owe taxes when we file this year?
Thank you,
Thank you so much for your time and help 🙂
Hi Lesli, I’m going to give you the same advice that I gave to Rachel. Use the IRS withholding calculator. Although I think you’ll be safe if you both claim married, but withhold at the higher single rate with zero exemptions, you can probably take more money home in your paychecks and get a lower refund if you adjust your withholding.
Hi Rachel,
It sounds like you’ve got a good refund coming for this year too. I think that the best thing is to use the IRS withholding calculator. Wait until you file your tax return and use the information on it to get the most accurate answer.
The IRS calculator will help you set your withholding so that your refund will be zero, If you want to have a bit of a refund, then you you’ll claim fewer exemptions than what the IRS calculator says you should claim.
Good Morning,
Me and my husband recently got married and we want to update our W-4.
Can we both file Married, at a higher rate and 0? We don’t have any kids, so its just us. We just don’t want to get fined or have to pay to the government at tax time.
He makes $100,000 and I make $45,000.
What is the best way to claim on our W-4s?
Thank you
Lesli
Hi Jan,
My husband and I currently both work and claim married but withold at a higher single rate with 1 allowance each. Last year we got a return of about $5,500. I would rather have more money each paycheck and thus want to change my allowances but am not sure what to do. In 2014 we bought a house and that is all that changed from 2013 to 2014. He works for the railroad and makes about 80k+ a year whereas I only make about 32k a year. Should we follow your “married and both spouses work” advice?
Also, we live in Kansas City – should we keep the MO state withholding as married both spouses work with 1 allowance each?
Thanks,
Rachel
Hi Judy,
I’ve got a blog post that was almost written just for you. Except, I would add one more scenario to the list. Have your boyfriend claim 1 child and head of household, and you claim the other child and claim single. Also, read the whole list of scenarios in the post about exes: http://robergtaxsolutions.com/2015/01/tax-strategy-for-exes-that-get-along/
The thing is, because you and your boyfriend are working together, you may as well figure your tax liability together and do what’s best for you as a family (even though you aren’t married.) After all this time, I’m pretty sure you are a family, right?
Then, with the extra money you come up with by maximizing your refund, you can do something nice for his mom too. Everybody wins.