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6 Answers

How many allowances should I claim on my w-4?

Asked by: megan 6848 views YA Discussion

I am wanting to change my allowances on my W-4 to get the most out of my paycheck. Right now I only claim one and I always get back a nice refund of around $ 6000. However I could really use that $ 500 a month or so to help pay bills every month. I am a single dad of 4 kids and things have gotten tight. A friend of mine mentioned this to me as a way to bring in more monthly income rather than waiting for that big check every April. So how many could I claim without having to owe the IRS come tax time. I make roughly $ 50-$ 55K per year an usually pay in nearly $ 10K in Federal taxes by claiming just one. Is there some way to calculate this to make sure I am not under paying? Any help would be appreciated. Thanks!!
oh yea,I am not sure if this matters, but when I file my tax return each year I only claim two of the kids as dependents. The mother claims the other two. That way we both benefit from the tax benefits.
We have joint custody so we split the time 50/50. it was court ordered that we both can claim two. We did it last year with no problems.

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6 Answers

  1. tro on Aug 19, 2011 Reply

    to be correct about your W4, go to http://www.irs.gov and find the W-4 Calculator, it will help you
    it would be assumed you are signing a #8332 to allow the mother to claim two of the children,
    otherwise the parent with whom the children spend the majority ‘nites’ with is the parent to claim the children

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  2. Bostonian In MO on Aug 19, 2011 Reply

    Since you are only claiming 2 of the kids, you should be claiming 8 allowances assuming that the two that you are claiming will be under age 17 as of the end of the year.

    Self: 1
    Head of Household: 1
    One job: 1
    Children: 2
    Child Tax Credit: 4

    Total: 9

    I’ve knocked it down by 1 allowance to leave a bit of wiggle room.

    If they live with her and she is giving you a Form 8332, you should knock it down by 1 or 2 allowances since you can’t file as Head of Household.

    Edit: Court orders are irrelevant, as is “joint custody.” The IRS must ignore them. Under the tax code, the home where the children spend the majority of their time is the custodial parent and is the one who gets all tax benefits — exemptions, HoH filing status, Child Tax Credit, Additional Child Tax Credit, EIC, and Child & Dependent Care Credit. Keep a calendar if you need to showing which nights in which home. The custodial parent can surrender the exemption and the Child Tax Credit ONLY by giving the other parent a completed Form 8332 that that parent must attach to their return. That does not get you the EIC, HoH, etc.; those stay with the custodial parent.

    A court order can order you to surrender a completed Form 8332 under threat of a contempt citation, but the IRS will not allow the exemption without it. A state court cannot tell the IRS to ignore federal law, and the IRS is not a party to your divorce.

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  3. the tax lady on Aug 19, 2011 Reply

    The IRS website has an estimator. (withholding calculator) This will give you a guestimate for the allowances for the rest of the year. You would then update next January.

    “I am not sure if this matters, but when I file my tax return each year I only claim two of the kids as dependents. The mother claims the other two.”

    So, who is the custodial parent who actually has the children 183+ nights per year? If it is her, you MUST have a signed 8332 form for each of the children you do claim and you can only claim the exeption and child tax credit. A non-custodial parent must file as single as they are NOT eligible for HOH. (That is, you can’t both claim HOH unless you can actually proof the children are split up.)

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  4. Bobbie on Aug 19, 2011 Reply

    And you really need to be very careful with this matter and make sure that you do NOT end up having to send a payment for failing to enough federal income tax withheld from your GROSS wages earnings for the tax year.
    And you are the only ONE that will have and know all of the needed information that you will have to use for this purpose of trying to increase your NET take home pay check by decreasing your amount of the FIT withholding amounts.
    Are you a married taxpayer living in the home with the wife and the children?
    Divorced and do any of the children live with you in your home for more than 6 months or 183 nights during the tax year?
    Does the mother furnish you with the signed form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent each tax year?
    IRS Withholding Calculator Can Help Figure Your Tax
    If you have too little federal tax withheld from your pay, you could end up owing a lot of money when you file your taxes. If you withhold too much, you will get a large refund next year, but that means you gave up the use of your money for several months during the year.
    You may want to adjust your federal tax withholding with your employer. You should also evaluate your withholding if you have recently married or divorced, added a dependent, purchased a home, changed jobs or retired.
    The withholding calculator at IRS.gov can help you figure the correct amount of federal withholding and provide information you can use to complete a new Form W-4, Employee’s Withholding Allowance Certificate.
    Before you begin, have these items:
    *.Your most recent pay stubs.
    *.Your most recent federal income tax return.
    *.Here is some tips for using the withholding calculator:
    *.Fill in all information that applies to your situation.
    *.Estimate when necessary. But remember, the results are only as accurate as the information you provide.
    *.Check the information links embedded in the program whenever you have a question.
    *.Print out the final screen that summarizes your entries and the results.
    Use it to complete a new Form W-4 (if necessary) and give the completed W-4 to your employer. Keep the print of the final screen and a copy of your new W-4 with your tax records.
    For many people, the withholding calculator is a great tool that can simplify the process of determining your withholding.
    However, if you are subject to the alternative minimum tax or self-employment tax or if your current job will end before the end of the year, you will probably achieve more accurate withholding by following the instructions in Publication 919, How Do I Adjust My Tax Withholding, which is available at http://www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
    Hope that you find the above enclosed information useful. 07/30/2011

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  5. Montgomery and Wetenkamp on Aug 19, 2011 Reply

    Excellent question. The key, as indicated in your question is calculating the precise amount that you will owe come tax time so you do not need tax relief for under withholding. However, you do not want to give the IRS an interest free loan by over withholding. Your federal income tax withholding is based on how many exemptions you claim on your Form W4. The lower your withholding exemption number (zero being the lowest number), the higher the withholding amount. In stride, the higher your exemption number, the lower you withholding amount. You can estimate you federal taxes to be withheld by reviewing IRS Publication 15 Circular E: http://www.irs.gov/pub/irs-pdf/p15.pdf, and/or the withholding calculator available on the IRS website at http://www.irs.gov/individuals/page/0,,id=14806,00.html. Using these resources you can calculate how much taxes you should be paying and the appropriate withholding allowance. If you don’t anticipate any changes in your household or earnings, you can also use your prior tax year’s taxes owed as a loose guide to determine approximately your tax exposure for the current year. http://www.mwattorneys.com

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  6. htm182111 on Aug 19, 2011 Reply

    1/- Let’s estimate your tax liability of 2011 with the $ 55,000 income, I suppose your status is HOH, 2 dependents under 17 .

    55,000 – (8,500 + 11,100) = 35,400. This is your taxable income

    Your tax liability would be ( based on page 6, schedule Z of form 1040ES 2011 ) :

    1,215 + 15% ( 35,400 – 12,150 ) = 4,703

    You get 2,000 for Child tax credit ; 4,703 – 2,000 = 2,703 , this is your tax libility.

    2/- On your W-4, your status is Single, 8 allowances;

    From paycheckcity, I have these results :

    Annual Gross Pay $ 55,000.00
    Federal Withholding $ 3,070.00
    Social Security $ 2,175.60
    Medicare $ 797.50

    Net Pay $ 48,956.90

    Check Date 07/30/2011
    Gross Pay $ 55,000.00
    Gross Salary YTD $ 55,000.00
    Pay Frequency Annual
    Federal Filing Status Single
    # of Federal Allowances 8
    Additional Federal Withholding $ 0.00
    State for withholding ???

    3/- Compare the FW and your tax liabity , you still have the refund :

    $ 3,070 – $ 2,703 = $ 367

    4/- All of those above are true if you have applied the W-4 from the beginning of the year.

    5/ Let’s see the numbers from 1 allowance as you have applied before:

    Annual Gross Pay $ 55,000.00
    Federal Withholding $ 8,425.00
    Social Security $ 2,175.60
    Medicare $ 797.50

    Net Pay $ 43,601.90

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