Claiming Allowances on W4, based on my household
I just started a new job and I had to fill out the W4 form. I am confused about claiming number of allowances.
Here is my household:
Me
Wife (Homemaker)
Child 1
Child 2
I make around 110-115K a year and live in Texas.
W4 form has the following question:
Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2)
I added everything up and it came out to be 8 allowances that I can claim. The HR person told me that claiming 8 allowances might mean that you do not pay anything in tax and in the end I end up owing money to Uncle Sam.
What is the best way to come up with claiming the allowances? What things I should consider.
(2)2 Comments
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In 2013, an allowance/exemption is like saying, "Please don't tax ,900 this year." So 8 allowances is K not taxed. It doesn't wipe out your tax withholding.
Circular E will show you the exact amount they'll withhold based on the allowances you claim.
Keep in mind, the withholding is run-rated. i.e. it assumes a full year of work. If you had no income for the first 6 months of the year, you will actually still have too much withheld even though the number is right for the full year, starting 2014.
Why did she say that? If you followed the worksheet and that's the number you calculated - go with it. I'm guessing you're getting the child credit for both kids, right? If so - 8 makes sense.
Make sure you have withholding of at least the amount of tax you owed last year to avoid penalties (if this year you end up owing more, that is).
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