You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the social security number of any dependent for whom you claim an exemption. If someone else claims you as a dependent, you may still be required to file your own tax return.
Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Tax Credit payments you received. If you are a dependent, you may not claim an exemption. If someone else — such as your parent — claims you as a dependent, you may not claim your personal exemption on your own tax return. Some people cannot be claimed as your dependent. Your employer needs your Social Security number so that when it sends the money it withheld from your paycheck to the IRS, the payment is appropriately applied toward your annual income tax bill.
After completing this step, single filers with a simple tax situation, as described above, only need to sign and date the form, and they are done. Everyone else has to take a few more steps. Say your tax situation is simple: You have one job, no spouse, no children, and you don't itemize deductions. Just fill out Step 1 and sign the form. You're done. Proceed to step two if you have more than one job or your filing status is married filing jointly and your spouse works. If this applies to you, then you have three options, from which you can choose one:.
Option A. Option B. Fill out the Multiple Jobs Worksheet, which is provided on page three of Form W-4, and enter the result in step 4 c , which is explained below. The IRS advises that the worksheet should be completed by only one of a married couple, the one with the higher-paying job, to end up with the most accurate withholding.
When filling out the Multiple Jobs Worksheet, the first thing you will need to differentiate is whether you have two jobs including both you and your spouse , or three, or more. If you have two jobs and your spouse does not work, you will also complete line 1. The left-hand column lists dollar amounts for the higher-earning spouse, and the top row lists dollar amounts for the lower-earning spouse. If you have three or more jobs combined, between yourself and your spouse, then you will need to fill out the second part of the Multiple Jobs Worksheet.
First, select your highest-paying job and second-highest-paying job. Use the graphs on page 4 to figure the amount to add to line 2a on page 3. Divide the annual amount on line 1 for two jobs or line 2c for three or more jobs by the number of pay periods. Option C. Check the box in option C if there are only two jobs total for the two of you, and do the same on the W-4 for the other job.
Choosing this option makes sense if both earn about the same. Otherwise, more tax may be withheld than necessary. If you have dependents, fill out step three to determine your eligibility for the Child Tax Credit and credit for other dependents.
Technically, the IRS definition of a dependent is pretty convoluted see IRS Publication for details , but the short answer is that a dependent is a qualifying child or a qualifying relative who lives with you and who is supported by you financially. Add the dollar sum of the two to line 3. In this section, the IRS asks if you want an additional amount withheld from your paycheck.
That could land you with a big tax bill and possibly underpayment penalties and interest in April. How do you know if this might happen? One likely cause is if you receive significant income reported on Form , which is used for interest, dividends , or self-employment income that you have not yet paid taxes on.
Or you may be still working but receiving pension benefits from a previous job or Social Security retirement benefits. Step four of a W-4 allows you to have additional amounts withheld by filling out one or more of the following three sections:. Fill out this section if you expect to itemize your deductions and want to reduce your withholding.
To estimate your deductions, use the Deductions Worksheet provided on page three of the W-4 form. This section allows you to have any additional tax you want withheld from your pay each pay period—including any amounts from the Multiple Jobs Worksheet, as described above, if this applies to you. The form isn't valid until you sign it. After using it to determine your withholding, the company will file it. You only have to fill out the new W-4 form if you start a new job or if you want to make changes to the amount withheld from your pay.
If you have too little tax withheld, you could owe a surprisingly large sum to the IRS in April, plus interest and penalties for underpaying your taxes during the year. However, if you have too much tax withheld, your monthly budget will be tighter than it needs to be.
At that point, the money may feel like a windfall, and you might use it less wisely than you would have if it had come in gradually with each paycheck. Internal Revenue Service. Accessed July 29, Accessed Feb. A dependent is often thought of as someone that is financially taken care of by a parent or guardian.
In they eyes of the IRS, you are a dependent if you can be a qualifying child or a qualifying relative. For tax years through , the Tax Cuts and Jobs Act of TCJA suspends the personal and dependent exemptions by reducing the exemption amount to zero. That means taxpayers can no longer take a tax deduction for dependent exemptions.
However, if someone does qualify to claim you as dependent, they might qualify for a different tax benefit such as a child tax credit or credit for other dependents. This amount is zero in tax years through However, you must determine if you are eligible to take the personal exemption. A lot of people wonder if you can claim adults as dependents. You may be a qualifying relative dependent if you:. If you meet all of these criteria as a qualifying child or qualifying relative, you are a dependent.
Note: The personal exemption amount is zero in tax years through However, there are other items on your tax return that are tied to whether you are eligible to take a personal exemption. If your parents claim you as a dependent on their taxes, they claim certain tax benefits associated with having a dependent. As a dependent, you do not qualify to claim those tax benefits. However, you may still need to file a tax return if you have income.
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