Business & Finance Taxes

How to Calculate W-2 Allowances

    • 1). Fill out the W-4 form.The withholding information on a W-2 form comes from the W-4 form normally filled out on the first few days of a new job. The worksheet for this form is handy for determining whether changes are necessary. You can either download the form from the Internal Revenue Service website or use their online calculator.

      Calculating your W-2 allowances require information about your marital status, your personal withholding allowances, and whether you want any additional money withheld from your paycheck.

    • 2). Complete the Form W-4 Personal Allowances Worksheet.

      Line A: Claim yourself if nobody else, such as a parent, can claim you as a dependent on their tax return

      Line B: Claim another exemption if you are single with one job, married and only one spouse is working, or a have a second income of $1,500 or less.

      Line C: If married, you are eligible to take another exemption for your spouse. Be careful in choosing this option as it may result in too little tax withheld. A better idea is to enter zero.

      Line D: Add one exemption for each dependent you claim. By definition, a dependent is someone who resides with you for more than half the year and receives at least half of their support from you.

      Line E: Add one exemption if you qualify as a Head of Household. By definition, a head of household can be married or single, as long as they file a separate tax return, and provide support to dependent children or grandchildren, parents, or other close relatives living at home.

      Line F: If you have documented childcare expenses, you claim another exemption here.

      Line G: Depending on your income and the number of children you have, enter additional exemptions here.

    • 3). Adding the exemptions claimed to give you a starting number. This number may not be accurate, especially if you are married and both spouses work, or if you are working two jobs. Download and read IRS Publication 919 for current information on checking and adjusting your allowances.

      If you prefer personalized assistance, visit the Internal Revenue Service Taxpayer Assistance Center. No appointment is necessary but you can make one, if desired. The telephone number for your local center is in the phone book under United States Government, Internal Revenue Service.

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