How to Change Exemptions on a W4

Changing a W4 is not as hard as it seems.

To ensure that proper payroll taxes are being withheld by employers, taxpayers in the United States should review their W4 withholding yearly or if they have a change in circumstances. Too much money withheld will result in giving the government an interest-free loan, and will cut down on net income per pay period. Withholding too little may create a large amount due on April 15. Some of the circumstances that might require W4 adjustment are marriage, home ownership, a new dependent, a dependent who has reached age 18, retirement and changes in income.

Things You'll Need

• Pen
• Blank W4 form

Instructions

1. Ask for a W4 form from your employer. If the employer doesn't have one, download and print the form from the Internal Revenue Service website.

2. Fill out the "Personal Allowances Worksheet" to get accurate withholding information. Enter "1" on line A. (This indicates that you are claiming yourself as a deduction.) Then, if you are single and have only one job enter "1" on line B, but if you are married you can also enter "1" if you have only one job and your spouse earns less than $1,500 per year, or you have a second job, and that and your spouse's job together produce less than $1,500 per year.
   You may enter "1" for your spouse on line C, but if you do not have any other exemptions (children, house) and your spouse works, you may want to enter "0" to avoid owing more taxes at the end of the year. Next, the number of children or other dependents that you have is entered on line D. If you are unmarried, but pay more than half of household expenses, you may enter "1" on line E. If you spend more than $1,800 in child care or other dependent expenses (other than child support) per year, you may enter "1" on line F. Enter "2" for each of your dependent children unless you are in a high tax bracket. In that case, enter "1" for each.

3. Add up your lines. Write the number on line H. It's OK if it's different than what you claim on your tax return.

4. Fill out the "Deductions and Adjustments Worksheet" if you intend to itemize your deductions on your tax return. If there are two or more jobs per household, fill out "Two Earners Multiple Jobs Worksheet."

5. Fill out the W4 form using the information you have just entered. Your personal identification information goes in section 1. Take the final number of line H of the worksheet and enter it in the box on line 5. If you have had to pay additional taxes in the past, you can request that your employer take more money out of your paychecks. Enter this amount on line 6. Enter the word "Exempt" in box 7 if you didn't have to pay taxes last year or think that you'll earn less than $950 this year.

6. Sign and date your W4 and return it to your employer.

References

• Internal Revenue Service: W4 Personal Exemptions
• Brigham Young University: Annual Review of Form W4
• H & R Block: Tax Tips and Calculators

Resources

• IRS
• IRS: W4 form