The Personal Allowances Worksheet helps you obtain the number of allowances that will be placed on Line 5 of the Form W-4. This form is retained by your employer and your payroll provider, and the IRS may request to review these allowances in a few rare circumstances. The fewer allowances that you claim, the more taxes are withheld from each paycheck; the more allowances you claim, the fewer taxes are withheld from each paycheck.
If you are single and you do not claim any dependents, the worksheet recommends that you claim “1” allowance for yourself. You do, however, have the option to claim “0,” and many people do. If you claim zero allowances, more taxes will be taken out of each paycheck. Taxpayers with dependents will most likely write a number greater than “1” depending on how many dependents they have. The exemptions that a taxpayer selects may change based on the number of allowances his or her spouse claims, as well.
Being single or married can also affect how much is withheld from your paychecks. Selecting “single” will result in withholding more than if you were to select “married”.
Line 6 on a W-4 is to designate any additional amount of money that you want taken from each paycheck. Most employees whose only source of income is wages reported on a W-2 do not need to utilize this line. One circumstance where this would be necessary is if you expect to owe a lot of money to the IRS because of some other revenue stream you have outside of your W-2 income.
It is also important to fill out the state’s Form W-4 in order to have the correct amount withheld for the state income tax. Missouri is one of a number of states that require a separate Form W-4 and is just as important to fill out as the federal Form W-4. Click here for a full list of which states accept federal Forms W-4 or if they have their own state forms.
It is very important that the W-4 be filled out correctly in order to ensure that you are paying the correct amount of taxes to avoid any sort of surprises at the end of the tax season. Forms W-4 can be changed anytime throughout the year, not just when you start a new job or waiting until a new year and there is no limit on how often they can be changed.
If you have any questions about how to correctly fill out a Form W-4, contact your WK advisor at (573) 442-6171 or (573) 635-6196.