Americans around the country are preparing to file their taxes for 2022 before the deadline of April 18, 2023, now that tax season has officially begun.
If you work as an employee, an IRS W4 form asking you how many exemptions you want to claim may have already been given to you.
Here’s what you need to know about the IRS W4 form and tax allowances
What is IRS W4 Form?
Employees must complete IRS Form W4, an Internal Revenue Service (IRS) tax form, to disclose their tax condition to their employer. Based on the employee’s marital status, the number of benefits and dependents, and other considerations, the W4 form instructs the employer how much tax should be deducted from the employee’s paycheck. Employee’s Withholding Allowance Certificate is another name for the IRS Form W4.
The W4 worksheet’s first section allows taxpayers to add one allowance if they are unable to be claimed as a dependent on another person’s income tax return. If an employee is unmarried, has one job, is married and has one job but no other employment, or has earnings from a second job held by a family member totaling less than $1,500, they are eligible to get another allowance.
Employees are asked to provide allowances for additional dependents that will be claimed on their tax return on the following line, designated as line F for credit for extra dependents. The definition of a dependent is outlined in IRS Publication 501. For credit in this part, there are income restrictions.
Fill outline G if you want to claim additional credits, such as the earned income credit (EITC). Worksheets 1-6 in IRS Publication 505 might help you determine if you may be eligible for additional allowances. Add up all the numbers from the preceding lines and enter the total on the last line, line H.
For more complicated tax scenarios, such as taking itemized deductions on your tax return rather than the standard deduction, the worksheet also includes additional pages.
Form W4 determines how much tax will be withheld from your pay (Photo viaGetty Images)
Using the allowances computed on the IRS W4 form, the employer then determines the amount to deduct from a worker’s paycheck. After each paycheck, the IRS receives the money that was withheld.
Read More: 2023 Tax Refund Of IRS: What Should You Expect?
Guidance On State Tax Payment – IRS
How many allowances should you claim on the IRS W4 form?
The number of allowances you should request entirely depends on your unique circumstances. The situations listed below, however, allow one to claim zero, one, two, or three allowances.
You should not claim any allowances if you are single and someone else’s W4 is claiming you as a dependent.
The most logical situation for claiming one allowance is when you are single, have one job, or are married and filing jointly.
If a person is unmarried, has more than one job, or is married but files taxes separately, they may claim two allowances.
Those who are married and have one child or more typically apply for three allowances.
Finally, it would be wise for persons who work many jobs to claim allowances from their highest-paying position rather than claiming the maximum number of allowances on each IRS W4 form.
Read More: IRS: Taxpayers Can Claim The Michigan Earned Income Tax Credit
IRS Tax Relief 2022: See How California Disaster Victims Would Maximize Benefits
