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
@Jennifer,
You understand my little problem then. It’s easier to save money when you can’t touch it. That’s one good thing about the IRS–when they’re holding your money, it’s really hard to get it back! 🙂
I claimed myself as a dependent at both jobs, I guess I read it wrong? I thought I could claim myself because at my other job I makes less that 1500 but was that for the month or year?
Hahaha!!! Thanks so much Jan, I’m glad i’m not the only who oddly looks at it that way…plus if i see it there or KNOW its there, i may spend it! lol
Hi Jennifer,
If you want the largest refund possible, then you should both withhold at the higher single rate with zero exemptions. You can, if you wanted to, even withhold an additional amount from each paycheck. Put the dollar amount you want taken from each paycheck on line 6 of the W4. It’s like using the IRS as your own personal savings account.
The only downside to this is: if something happens and you really need that money, you won’t be able to access it until tax time. So–putting the money into a savings account is another option. (I think I’m supposed to say that. I think they teach that in tax school somewhere along the line. Truth be told-I personally like a nice big refund. I’m not supposed to, I’m a tax professional. But I do like the big refund myself.)
Hi Aianya,
I just want to make sure–you are living with your husband? Yes? Filing Married filing separate but you get to claim the two children? Then I would put single, 3 exemptions on your W4. No more.
Now, just in case I’m wrong. If you are married and not living with your husband, and won’t be living with him for the last 6 months of the year–but you have custody of the two kids and he doesn’t get to claim them at all? Then 4 exemptions at least, and another exemption for each child aged 16 and under.
But–(always a but, isn’t there?) If you two are fighting over who gets to claim what. Stick with the 3 exemptions so you don’t get burned at tax time.
Hi Mona,
First, you would claim 1 for you. (A)
Claim 1 for being married with only one job (B)
Claim 1 for your husband (C)
Don’t claim anything else. You’re not head of household, because you’re married filing jointly and you’ve already checked a box for that.
BUT—-and this is important!!!!! You mentioned your husband is on a VISA, so are you a foreigner? Because that could change your tax return. For example: if you’re here on a J or F visa you’re considered to be a non-resident, and you may not be able to claim your husband as a deduction. (It all depends upon what country you’re from and what the tax treaties are.)
Or, if you’re on an H Visa, but haven’t been here long enough you may still be considered a non-resident and be subject to filing a non-resident return.
But, if you are able to file as a resident, then the advice I gave you still holds. (If you’re a US “resident” remember that the US taxes worldwide income.)
If you’re not a resident, you might want to just claim the one exemption and have them withhold the extra tax to make sure you’re covered.
Hi Diane,
Now that your daughter is 24, you won’t be able to claim her as a dependent unless she makes less than the exemption amount ($4,000 for 2015.) So, she should claim one exemption. And you–you may need to adjust your withholding as well. Not being able to claim your daughter will reduce your refund (or increase your balance due.) Plus, if she is your only child and you had been claiming head of household–well you’d lose that too. So, right now, I’m more worried about your W4 than hers.
My suggestion is for you to go to the IRS W4 planner and run your figures through there to figure out what you should be doing. Good luck.
Hi Samantha,
Congratulations on your fist job!
For you, you need to skip all that stuff about allowances on the top half of the form. Go down to that part where you separate the form for your employer. In box 5 you will put a 0. In box 3 you will check “single”. (I figure you can handle the name and social security number stuff.) That’s it.
Hi Jan,
How should we tweak your recommendation below as I assume this is so that you can zero out your refund (get no refund and not have to pay…or as close to it as possible)? My husband and I prefer to get a large refund in April.
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
Hi I am married filling separate.(i cant file separated because I am not legally separated) I have 2 children and want more back on my checks.what do I claim on my w4
Hi Jan,
I am working female husband not working because he is on dependent visa not allowed to work. I am the only one working and paying all the bills all year around. Can i claim head of household on W4 personal allowance worksheet column E? I filled W4 with the following and stuck at E. Please guide me to fill it correctly.
W4 Personal allowance Worksheet ( A1,B1,C1,D1,E?,F0,G0,H? ) do i need to change anything else.
Thank you
My daughter is 24 and starting her first full time job. She is still in school and i usually claim her on my taxes because I will provide the majority of household expenses. I also have her under my health insurance until she turns 26. On her w4 should she claim 0 or 1?
Hi, I’m filling out a W4 for my first job and I’m confused about what to put for allowances and exemptions. I’m full-time student, single, this will be my one job, and my parents claim me as a dependent. So would I claim 0 allowances and 0 exemptions?
Hi Austin,
So my question to you would be, do you have anything you can deduct on a Schedule A, like mortgage interest? What about charities? If not, then I’m thinking you’ll want to change your withholding. You’re a good candidate for the IRS withholding calculator to see what would bring you to a zero balance due.
Although, if you have nothing to claim for deductions–my best guess is to switch to zero exemptions for now to have enough withheld to 2015, then go back to 1 exemption for 2016. But do the IRS caclulator first. It really is a good tool.
Hi Jen,
Yes, I’d still claim zero exemptions. I only have one question for you–will you be having taxes withheld or will you be contract labor? The reason I ask is that a lot of the work from home jobs are contract labor (nothing withheld at all – you pay all your own taxes).
But, you’re asking about a W4 so I’m guessing your company is paying wages. So, claim zero exemptions. If you’re withholding too much, you’ll see it in your tax refund.
If you are contract labor, not W2–you’ll be paying self employment taxes and your tax bill will be higher because you’ll not only pay tax, but also your social security and medicare taxes as well (15.3%). So please, when you get your first pay stub–take a really good look at it and make sure they are doing withholding. (I’ve dealt with some people who got burned thinking they were getting a wage and instead got 1099MISCs instead of W2s–that’s why I’m being so cautious.)
Hi Terry,
Welcome back to the workforce! I remember being a stay at home mom and going back for the first time. Congratulations!
I’m guessing that since you were working as a stay at home mom, (because it is work and we both know it!) that you also have a working husband. So, I would claim zero exemptions. That way, it should cover you for being in a higher tax bracket because you have to account for the fact that your husband has income also.
Hi Aaron,
My gut reaction is that your wife should have moved her exemptions down to zero after the last tax bill of $3000. Generally–and this is a generalization that doesn’t work for everybody, each exemption is worth about $1000 in taxes. So, you owed $3000 so you’d lower your exemptions on the W4 by three.
Now that’s a generalization, it doesn’t work for everybody, but I’m thinking that you’re in the right income and circumstances to use that as a guideline.
Now–I’m concerned about the W4 calculator saying you should use 5 exemptions. Clearly, that’s not right for your situation? I see using the worksheet on the W4 form giving you 5 (which is why I don’t like it). But really, the IRS calculator should get you to a figure that gives you a zero balance due.
I recommend going back to the IRS calculator with your current pay stubs in hand and your last year’s tax return and running it one more time. I’m thinking it will suggest your wife change her withholding and probably withhold extra until the end of the year to get to that zero balance due. Good luck.
Jan:
On my W4; I am a single, living on my own, independent with no kids, not being claimed by anyone else, yet I claimed 2 exemptions. My expected gross income this fiscal year is 40 ~ 50k and I was wondering how that will affect me and whether I should change my exemptions to 1 or even to 0 in order to account for having 2 exemptions for most of the year. I am worried about owing money at the end of this year.
Additional info: Live in CA, and have one job.
Thank you
Hi- My husband is the primary earner and we have 3 kids, but I will be starting a very small part time job. Based on your guide above. I should claim zero exemptions? I will have to work from home and provide several of my own resources for the job, will I be able to recuperate any of the taxes withheld. Thanks!
Hello,
I need help with my W4. I have been a stay at home mom for many years and I just got a job, I will only be making about $2300 for the year (an aide at a school). I have no idea what to claim on my W4. Any help or advice would be greatly appreciated!
Hi Jan,
I’m married with two children. We own a house and pay a monthly mortgage payment. Gross household income was approximately $160,000 for 2014. We just work at one job each with no other sources of income. According to the W-4 calculator, we can claim somewhere in the neighborhood of 5 last time I checked. In reality, I claimed 0 and wife claimed 3 and we still ended up paying around $3,000 in taxes. My wife changed her claims from 3 to 2 after we realized we had to pay. Will this be enough to not have a shortage for 2015? Should we drop it down to 1 or even 0? Hope this is enough information. Thank you for your advice you’re providing us.
Thank you so much for your help and advice, Jan! 🙂
Hi Leah,
Let’s see…you’re successfully raising three kids on your own? I’m thinking you’re pretty smart.
I think you’re fine claiming 4 exemptions and I would claim head of household. Bring home more money in your paycheck and I think you’ll still be getting a refund too.
Hi there,
I am a single mother of 3 kids who works one full time job. I support our family and we live on our own. No one else can claim myself or the kids as a dependent. I have always gotten huge tax refunds, but I would like to get more each month on my check to make ends meet. Should I be filing as single or head of household? Also, should I be claiming 4 exemptions (one for me, one for each kid) in order to get the most back monthly? I have been filing as single with zero exemptions for years. Not feeling too smart about that right now. Thank you in advance for your help!
Hi Kelly,
I’m confused. If you’re self employed, you’re not filling out a W4. Or did you mean that you got a job that pays $30K in wages in addition to being self employed? In which case, I can’t tell you what to withhold–I don’t know how much you’re making in self employment. If you’re making $30K in self employment, then you’re not doing a W4 for that and I don’t know what you’re making in wages.
I do recommend that you set aside at least 15% of your income for your self employment tax though.
Hi Lori,
What you claim on your W4 will have no effect on whether or not your children qualify for EIC. The W4 is just a way of telling your employer how much money to take out of your paycheck for your taxes. The tax return tells the IRS who you are claiming in terms of claiming EIC. The W4 won’t kick you out of being able to claim EIC benefits.
Hi Helen,
I’ve got a couple of comments for you. First, if you’re not claiming your brother on your taxes, you’re not really claiming him as an exemption on your W4 (or you shouldn’t anyway.) Second, you might still be able to claim three exemptions on your W4 even without your brother–one for you, one for your child, and probably a third for the child tax credit. So, I’m feeling pretty comfortable with you claiming three exemptions.
Now, here’s my third issue–if your brother lives with you, why is your mother claiming him as a dependent? Now there could be good reasons for that which make sense, like he’s in college and you live near the school, etc. But–if you are providing your brother’s support, roof over his head, food on the table, making a life for him–then I have an issue with letting your mom claim him. I just want to put that out there. Only you know the true story there, I just want to make sure that you are being treated fairly.
Hey I’m self employed last year claimed 18000 on my taxes just got a job for 30000 a year should I claim zero or one? I know I will have to pay in for my self employment regardless. I typically like less taxes taken out but not sure what I should do here please help!
Hi,
It seems like I am in the same boat as Sydney except I would like for less taxes to be taken from my check. Single parent of 2 who is HOH. Will this effect my children qualifying for EIC if I do make any changes?
Thank you!
Hi Jan,
My question is: can I claim 3 on my W-4 (myself, child, and brother; whom lives with me) and during tax time claim 2? Although my brother lives with me, my mom claims him during tax time.
Hi Felicia,
I went to the Georgia website to check out their withholding rules. I think you’re find claiming 2 exemptions. You can claim 1 for your self-filing as head of household. And another for your child. That makes sense. That totals two. I suspect that you probably have more deductions that can be claimed in Georgia, that’s why you’ve been able to claim 3 with no problem. But, if you’re worried, claim 2 for Georgia (but I’d stick with 3 on the federal.)
Hi Denisse,
It’s probably fine for you to put “exempt” on your W4. If you’re going to make over $5,000, then I’d change it to Single with zero exemptions, But if this is just a part time, job for school, I think you’ll still be fine with exempt. Since you are a full time student, this will not affect your father being able to claim you on his taxes.
Hi Renae, I’m thinking that married with zero exemptions sounds about right. But you can try the IRS withholding calculator. You’re a good candidate for that.
Switching to married with zero exemptions will definitely reduce your take home pay.
Hi Sydney,
It’s hard to say what would be the smartest thing to do. Mostly, the issue is what works best for you? That said, if you only have one job, you could probably claim 3 exemptions pretty easily. Just remember, that each exemption reduces your refund a bit.
So, what’s good for you? More money in your paycheck or more money in a refund? It’s not a smart versus dumb, it’s a which choice makes you happier?
I am single, never married and have an 8 yr old. I have been claiming 3 on my State of Georgia . Just received an email that the state of Georgia witholding tax requirements changed in 2013. Not sure what to claim now, Head of House Hold or Single. I don’t want my take home pay to change too drastically less and I LOVE getting a refund yearly. Should I claim Head of Household on my W4 or Single with along with my son. So should I claim 2 or 3 as total allowance and can I do either? It states that Single and Head of Hosuehold maximum allowance is 1, what about my child?
Hello I had a question about putting exempt on a W4 Form for a job. I completed and I put an exemption on it. I am a Full Time student and I am a dependent for my father and this will be my first job. I have not filed taxes before, I was wondering I did right by putting down exempt on the form. Or if I could change it later. Also would it affect my being a dependent for my father next year?
Hello,
When I started my job and filled out the W4 I was a single mother with two dependents. (One a child and one a parent). I got married this year and my spouse works. I need to change my status and allowances (currently single and 6 allowances) to reflect the change. My husband is filed as married and zero allowances. When looking at the W4 I am eligible for 4 exemptions until I use the working spouse part which encourages me to file married with zero exemptions. I was wondering what I needed to file as, and if I ended up changing mine to married and zero allowances how big an effect that would have on the paycheck I make (I’m paid monthly).
Hi! I’m a single mother of 2, head of household what’s the smartest number for me to claim right now I just claim 1, but what would be the smartest move to make, I claim 1 because I want more on my check, and last year I still got a great refund, I just want to be sure Im making the right and best choice. So which would be smartst for a single mother with 2 dependents?
Hi Angela,
It depends. But my best guess is that you would claim 4-but that’s shooting from the hip. One for you, one for claiming head of household, one for the kid in college, and the fourth because you should get a nice tax credit for the kid in college. I’m guessing you’ll get nothing for the adult child not in college.
That said, the IRS withholding calculator is a great tool and can fine tune that number better than I can. If you receive EIC, you could probably claim another exemption. If your stay at home child has no income, that might make for another exemption also. If the college kid is on 100% scholarship–I wouldn’t take the extra exemption for the college tax credit.
I hope that helps a little anyway.
Hi Brianna,
Once your employer has withheld and paid those taxes to the IRS, they can’t get it back. So the only way you get your money back is filing a tax return and claiming a refund.
Hi Charles J,
Don’t claim “exempt” because technically that’s not legal. Read the post above that I wrote to Laura. You can up your exemptions to have less taken out, but don’t claim that you’re “exempt” because you’re not.
Hi Laura,
Interesting question. Frankly, I don’t think claiming 100 exemptions will get you any more money than 60.
First, and most importantly, you will never get a “full” paycheck. No matter how many exemptions you claim, there will always be social security and medicare taxes taken out. So, let’s say you make $1,000 per pay check every week. Even if there is no federal withholding, there will still be $62 taken out for Social Security and $14.50 for Medicare. Also, there may be state tax in there as well. So you need to account for that too.
Now, the quick and dirty method to figure how many exemptions you need to zero out your federal withholding is to take your weekly pay and divide by $76.90. (I know, sounds nutty but that’s how the tax tables work.)
So lets say you made $100,000 a year. That’s $1923 a week. If you divide that by 76.90 you get 25. You’d need 25 exemptions to zero out your federal withholding.
Now if you’re making that kind of money, and you don’t withhold–you’re going to get hit with a pretty major tax bill come April. So, if you’re doing this, make sure it’s temporary. Otherwise you just exchanging one type of debt for another.
Good luck.
I have never been married, head of house, full time job, part time job, 1 kid starting college and living at home, another kid not in college this year….just working taking a year off.
What should I claim???
HI, I’m a college student and i am in the work study program. I did not file a new w4 this year, and just found out that i have had taxes taken out of my checks since February as result. I was unaware that the W4 had to be turned in every year. Is there anyway to be reimbursed for what I was taxed, because I should be exempt? Work study is my only form of income.
Hi, I have a question, where I am being laid off from my job in a week, in which my last check and all my PTO will be around $4600; I’m single, with 2 listed on my w-2; I want to know can I file exempt before that day comes; to where i won’t get tax that much by the fed on my last check; what are my scenarios i’m looking at;
Hi,
I am a single parent that claims head of household. I have been trying to get a full paycheck for a couple months so I can get back on track due to medical bills. I claimed 20 exemptions one month and only got $150 more than normal. This month I claimed 60 exemptions and got $225 more. Is it wise to claim 100 exemptions to receive a full check for one month? I do get a hefty refund but am trying to lower my debt now. I hope this makes sense. Thanks for your help.
Hi Jennifwr,
Personally, I think you should claim zero exemptions – which is different from saying you’re “exempt” from taxes. My guess is that your parents will claim you on their tax return. If you make over $6,300, then you’ll have taxable income. (If you’ll make less than that for the year, then my all means you can still be “exempt”.
Money now versus money later? It’s a personal decision. I like money now. But it’s nice to get a little refund too–but it’s your choice.
Hi I’m a college student and I’m still trying to figure out if I should exempt myself from withholding all my taxes for the year. I’m working basically full time only for the summer but when I go back to school I’m going to be working a lot less. Would it be more beneficial to exempt from withholding my taxes or claim one allowance and have the taxes taken out and get a tax return at the end of the year ?
Hi Cheryl,
If you’re going to receive $8000 in tax free income–then there’s nothing you need to do because tax free income won’t change your income tax return.
If you’re getting $8000 of taxable income, let’s say you’re in the 25% tax bracket, then the IRS will take $2000 – you’ll still have a pretty hefty refund coming keeping things as they are.
And worse case scenario–that $8000 is self employment income, let’s assume that’s taxed at 40% – well then you’re still only looking at $3200 in taxes and you’ve still got a decent refund so I’m not too concerned about it.
I’m guessing that you’ve got some EIC going in your refund, that usually accounts for the large refund amounts. So the $8000 could affect the EIC. You might want to talk to a local preparer and get some numbers on paper to see what’s really going to happen.
I need some advice. I claim two exemption on my w4 form. Every year I receive a huge refund of about 7500 dollars, however this year i will be making around 8,000 dollars more that will be tax free. What should I do to ensure that I do not have to pay any taxes and receive a refund.