Claiming a number of W-4 allowances begins with knowing the number of personal and dependency exemptions you claim on your tax return. Make sure you get it right! The number of allowances you claim determines your tax withholdings as well as the size of your refund. So limit the surprise around the time you file taxes. So how many allowances can you claim and why?
If you claim zero allowances that typically means that someone else is claiming you on a tax return such as a spouse or legal guardian or you have zero dependents. The maximum amount of tax is also withheld meaning that you would get a return if you file one. If you claim one this typically means you are single and hold one job while if you claim two, it typically means you are married. It can also indicate that you hold two jobs and are claiming two allowances at one job and zero at the other. Or you can simply claim one allowance at each job- whichever you prefer. While this option will get you closer to your tax liability it may result in due taxes so make sure you check up on that with the IRS.
Claiming three allowances typically means you are married and have one child. While most claim between 0-3 allowances there is an option to claim additional allowances for other purposes if needed. These other purposes include filing as head of a household that has many people, claiming child payment and other credits, and if you are eligible to claim a child tax credit. Before filing a W-4 make sure you know which allowance is the best option for you especially if you want to receive the best available return.
If you find that you need to resubmit a W-4 because of changes in your life, employment or feel you have made a mistake, filing a new form is acceptable. Changes in the number of W-4 allowances that you may want to note are in case of a divorce, a new child or number of dependents in your home, or a new marriage. The number of allowances you ultimately end up with on your W-4 will eventually determine your pay after taxes and your return during tax season. So make sure you fill out the form correctly especially to determine if you are eligible for a refund.
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