Question

How should I claim my W-4 allowances? If I claim more exemptions than I actually have on my W-4, will it make a big difference in the taxes I owe?

Answer

You don’t claim exemptions on a W-4. On IRS Form 1040, exemptions can be claimed when you file your return. On the W-4, allowances can be claimed that will determine the amount of tax your employer will withhold from your paycheck.

The number of allowances you claim on your W-4 might not match the number of exemptions on your return. The guidelines suggest you claim an allowance for exemptions you expect to have. However, you can also claim allowances for other situations. Ex: If you expect to have a large amount of itemized deductions that will lower your tax, you don’t need to have as much withheld. Then, you can claim additional allowances.

If you claim too many allowances on your W-4, your employer probably won’t withhold enough tax. You could end up with a large balance due. The amount of the balance due will depend on the difference between the tax withheld and the tax you owe. There might also be an underpayment penalty for not paying the tax as you earned the income. There are worksheets that come with the W-4 that help you find the correct number of allowances to claim.

Related Topics

Related Resources

IRS Letter 106C – Claim Partially Disallowed

Learn more about letter 106C, why you received it, and how to handle an IRS 106C letter with help from the tax experts at H&R Block.

IRS Notice CP518B – You Didn’t File a Tax Return

Learn more about notice CP518B and how to handle an unfiled business tax return with help from the tax experts at H&R Block.

I have a question about filing Form 1099-MISC after receiving refund. Can I report my W-2 income and get my refund and t

Learn how to file form 1099 misc. after receiving your refund with help from the tax experts at H&R Block.

Identity Protection Personal Identification Number (IP PIN)

Learn about the identity protection personal identification number (IP PIN), which the IRS issues if you've been the victim of tax identity theft.