How many allowances?

[K + M 47]

I am working on filling out the W-4 for my employer so the correct amount is taken out of each of my paychecks, and I am reading a lot about the allowances online, and in different guides and such.  The meaning behind what allowances are makes sense to me, what they do and all that, but what doesn't make sense to me is how to figure out how many allowances to claim for my withholdings. 

 

Married - 1 income since spouse(wife) can't work because no EAD yet. And of course can't claim wife as dependent so that wouldn't have an effect.  For this situation how many allowances would I claim?

 

When filling out the W-4 federal form I got 1 allowance for myself, is this correct for married filing joint, 1 income?

 

Explanation of how to get to the correct allowance for this scenario would be greatly appreciated, thank you so much in advance.!

[Lemonslice 4,643]

You can leave it as is until she starts working, nothing urgent.

 

W4 changed recently, do you have the latest version?

Best calculator is still from the IRS

 

https://www.irs.gov/individuals/tax-withholding-estimator

[K + M 47]

1 hour ago, Lemonslice said:

You can leave it as is until she starts working, nothing urgent.

 

W4 changed recently, do you have the latest version?

Best calculator is still from the IRS

 

https://www.irs.gov/individuals/tax-withholding-estimator

I used that witholding estimator that just calculated how much I can expect in a refund from what I saw, and one of the main reasons I wanted the new allowance is so I can have another piece of evidence from my work where my allowance will say married or somehow list me and my wife for the GC interview

 

and yeah got the latest version from employer and same one was on IRS site

Edited February 14, 2020 by Kerri and Myles

[Wuozopo 4,290]

8 hours ago, Kerri and Myles said:

one of the main reasons I wanted the new allowance is so I can have another piece of evidence from my work where my allowance will say married or somehow list me and my wife for the GC interview

A W4 is not good evidence. You could turn in a different one every week (or until your payroll department got sick of you). It is no more than a way to estimate how much gets held out of your check each payday. You could turn in single because it’s not that “official” of a form. It is simply your word. Your only goal with a W4 is to try to come out even at tax filing time so you paid in enough during the year to cover the taxes you will owe.  If your wife will never work, then 2 is fine. You will get more in your paycheck than if you put 1 (just yourself).  

[K + M 47]

1 hour ago, Wuozopo said:

A W4 is not good evidence. You could turn in a different one every week (or until your payroll department got sick of you). It is no more than a way to estimate how much gets held out of your check each payday. You could turn in single because it’s not that “official” of a form. It is simply your word. Your only goal with a W4 is to try to come out even at tax filing time so you paid in enough during the year to cover the taxes you will owe.  If your wife will never work, then 2 is fine. You will get more in your paycheck than if you put 1 (just yourself).  

I need to send in an updated W-4 anyway for work as my status situation has changed since my last one that is on file, so it could be just another piece of evidence to have I am not doing it specifically just to have the evidence, I am still curious, how many allowances with our situation married 1x spouse working how many allowances would there be?  The W-4 I filled out says 1, is that correct?

[arken 4,197]

It’s usually 1 for yourself, 1 for spouse, and 1 for each dependent like child. Total allowance will be the sum of this.
 

However You can put 1 or 2 as you like, it’s not a big deal for W-4. If you put higher allowance, less taxes will be withheld each paychek, if you put lower allowance, higher tax will be withheld. During you tax return, you either get the return back or need to pay IRS depending on the allowance is used in W4. Tax return is the final one and takes care of it.

 

[K + M 47]

Just now, arken said:

It’s usually 1 for yourself, 1 for spouse, and 1 for each dependent like child. Total allowance will be the sum of this.
 

However You can put 1 or 2 as you like, it’s not a big deal for W-4. If you put higher allowance, less taxes will be withheld each paychek, if you put lower allowance, higher tax will be withheld. During you tax return, you either get the return back or need to pay IRS depending on the allowance is used in W4. Tax return is the final one and takes care of it.

 

I exactly thought the same way that it would be 1 for me, and 1 for spouse, and 1 for each dependent, but even tho married my allowances came out to be 1 never two, would my wife not be counted because she isn't working?  On the federal W-4 form I summed out what it had me answer it my allowances came out to 1 only, why wasn't it 2?  Because wife not working atm?

[Wuozopo 4,290]

1 hour ago, Kerri and Myles said:

I need to send in an updated W-4 anyway for work as my status situation has changed since my last one that is on file, so it could be just another piece of evidence to have I am not doing it specifically just to have the evidence, I am still curious, how many allowances with our situation married 1x spouse working how many allowances would there be?  The W-4 I filled out says 1, is that correct?

I passed this on to my wife, the American, for her experience since I have never had an employer or W4 in the US. (Self-employed). She said it is really just a big guess that you hope balances out when your do your taxes. And it is dependent on high how the income is and other sources of income like investments. She was a married stay at home Mom with two kids. Claiming 4 on the husbands W4 was the formula that was supposed to work. End of tax year they would have to send a check for thousands of dollars to the IRS because the “formula” did not hold enough out of paychecks to cover the tax bill. Eventually they did “zero” on the W4 and got closer to even with the tax bill and still owed a few hundred. It is just a big guess really. They IRS tries to work it out in their instructions but one size does not fit all. 
 

The logic is a man claims 1 for himself and 1 for a non-working wife. (2 for family)

Or man claims 1 for himself on his W4. Working wife claims 1 for herself on her W4. (2 for family)

What if man had two jobs? If he put 1 on first job, 1 on second job, and working wife put 1 for her job, you have 3 for that couple. That’s likely going to put too much in the paychecks and not enough held out to cover the tax bill. 

The logic breaks down also depending on income. Man has salary of $150,000. Wife has small salary of $20,000. When her payroll group calculates what to hold out of her check, it’s based on her being somewhere in the 10% tax bracket so not a lot held out.  But as a couple that’s a $170,000 income plus they have some investments paying out $10,000/yr. so $180,000 taxable is moving them into maybe 24% tax bracket. Her salary stacked on top of his is costing them more tax, yet a very small amount was held out of her check. One of them needs to drop their “number” in order to have more held out.

 

i don’t now if those percentages are accurate, but hopefully it shows the concept of one size does not fit all when it comes to a W4 because of other factors. And choosing married over single makes some adjustments. It is a big guess until you file taxes.  Either you send money to IRS for under-estimating or get a refund if you over-estimated.  A big refund doesn’t mean you are a genius at doing taxes. It means you gave IRS a lot of money to hold on to all year. You could have kept that money and invested a bit each month and earned some interest. 
 

So pick whatever you want on the W4 and you will find out if it worked out next year. If it didn’t, then change it.  If your wife won’t work for a year, pick 2. When she gets a job, change yours to 1 and she does a 1 for herself. If you love a huge refund, then go with 1 so more will be held out of your check.

 

I hoped that “non-answer” helped and made some sense to you as a concept.

 

 

Edited February 14, 2020 by Wuozopo

[belinda63 2,993]

The 2020 W4 no longer uses allowances. First change to the form in many, many years. Please go to irs.gov and look at the new form. 

[K + M 47]

1 hour ago, Wuozopo said:

 

The logic is a man claims 1 for himself and 1 for a non-working wife. (2 for family)

 

 

 

This is the only part that isn't making quite the sense to me, and this is in conjunction with the new W-4 forms that I am using for this year, I would suspect the allowance to be 2, but the way the form worked out for working husband, non-working wife was an allowance of 1 and I just don't understand why its 1 and not 2 here.

[K + M 47]

42 minutes ago, belinda63 said:

The 2020 W4 no longer uses allowances. First change to the form in many, many years. Please go to irs.gov and look at the new form. 

you are right, I filled out the new federal form, where it has the section for claiming dependents and part for other adjustments, and the part where you report multiple jobs or spouse works, if they don't use allowances anymore, what exactly do they use?  Do they just take into account your situation and from that they dictate exactly how much to take out of your paycheck each time?

 

The state one that I have to fill out uses allowances still tho, not sure if it is common practice for every employer/state, but for me personally I have to fill out one Federal W-4, and one state W-4

Edited February 14, 2020 by Kerri and Myles