How Many Allowances Should I Claim on My W4?
Londonderry, NH Resident Looks to Start New Job on the Right Foot
When you start a new job, to get paid via the company’s payroll each new employee will need to fill out
a W4 form. One of the most common mistakes on this form is how many allowances to claim. The
more allowances claimed, the fewer taxes will be withheld from your paycheck. However, if this
number is not correct for your tax filing at the end of the year you may be surprised with a hefty bill in
taxes that you owe. If you are single with one job or married filing as the of household you may want to
claim 1. Single individuals with more than one job or those married and dividing total allowances may
choose to claim 2. Those married with minor children living at home, will often choose three
allowances.
A Londonderry resident was starting a new job. When asked to fill out a W4, she was unsure of how
many allowances would be best.
The Implications of Choosing the Wrong Number of Allowances on a W4
The W4 form allows you to claim from 0 to 4 allowances. The fewer allowances that you claim, the
more taxes will be withheld. If you claim too few you will likely have a larger refund at the end of the
year, as you pay too much in taxes from each paycheck. If you claim too many allowances, not enough
federal tax will be withheld, and you may be surprised with a high tax bill when it comes time to file.
Ideally, you want to find the right number of allowances for your family structure and tax filing to have
as closely as possible to the correct amount of taxes withheld each paycheck.
If You Are Unsure How Many Allowances to Claim, Seek Advice from a Tax Professional
If you don’t know how many allowances to claim on the W4 for your future tax filing and family
structure, a professional tax advisor can help to guide you. The Londonderry resident reached out to the
team at Merrimack Tax Associates. They were able to help her determine the right number of
allowances for her W4 to ensure that she maximizes her paycheck, while still paying sufficient taxes to
avoid a hefty bill at the end of the year.