- You are responsible for paying taxes on your income, based on a number of factors including how much income you received, your marital status, your age and the number of dependents you claim. You can control how much money is withheld from your paycheck by making sure your W-4 is filled out correctly. You are required to complete a new W-4 any time you start a new job, but the Internal Revenue Service recommends checking your W-4 any time you have a significant life change, such as a marriage or the birth of a child. If your employer withholds too much money from your paycheck, you will get a big tax refund, but you will lose use of those funds throughout the year. If your employer withholds too little from your check, you may end up owing taxes when you file your return.
- The worksheet that comes with Form W-4 provides instructions on how to figure the appropriate number of allowances for your financial situation. You are always permitted one allowance for yourself. You can claim an allowance for your spouse if you are married. You can claim an additional allowance if you are single and don't work more than one job. You can claim an allowance for each dependent that you will claim on your federal income tax return. There are additional allowances if you qualify for the child tax credit. Each allowance you claim will reduce the amount of federal income taxes your employer will withhold from your paycheck. You may claim any of the allowances that are available to you, but you are not required to do so. You may claim zero allowances if you wish.
- The primary reason to claim zero allowances on your Form W-4 is so your employer will withhold more federal income taxes from your paycheck. There are a number of reasons why you might want to have more taxes withheld. The amount of taxes being withheld if you work one job may be correct, but the amount may not be sufficient to meet your tax obligation if you work more than one job. If your spouse works and you file your tax return using the Married Filing Jointly status, you likely will need to have more taxes withheld from your paycheck. You may have a large amount of unearned income that did not have taxes withheld and need to compensate for it.
- You can have your taxes withheld at the single rate, even if you are married, by checking the "Married, but Withhold at Higher Single Rate" box in Item 3 of Form W-4. You may specify an additional amount that you wish to have withheld each payday by entering the specified amount on Line 6 of Form W-4 If your employer is not withholding sufficient federal income taxes from your paycheck, even if you are claiming zero allowances.