A single person living alone with one job should claim 2 allowances. A married couple with no children and both having jobs should claim one allowance each.
Impact of Allowances on Tax Withholding
Claiming 0 allowances means more tax is withheld from paychecks, while claiming more allowances means less tax withheld. The more allowances claimed, the higher your paychecks but smaller refund.
Tax Exemptions in Current Tax Law
Personal exemptions reduced taxable income until 2017. Now, due to tax law changes, the personal exemption amount is zero. You can no longer claim an exemption for yourself or dependents.
Use the W-4 form worksheet to calculate the right number of allowances considering factors such as filing status, dependents, income, and deductions. An accurate calculation ensures the appropriate number of allowances.
What is the best number of exemptions to claim? Claim 1 allowance to have less tax withheld from paychecks, resulting in taking home more money now but getting a smaller refund later. Claim 0 allowances to have more tax withheld and potentially receive a bigger refund later.