Deciding how many allowances to claim on your W-4 form can significantly impact your financial situation throughout the year. Married individuals often grapple with whether to claim 0 or 1, as this choice affects the amount of tax withheld from their paychecks and influences their annual tax refund or liability.
The Role of the W-4 Form
The W-4 form, or Employee’s Withholding Certificate, allows employees to specify tax withholding preferences to employers, determining the amount of federal income tax withheld from their paychecks. The IRS uses this information to ensure accurate withholding, helping taxpayers avoid penalties or unexpected tax bills.
Since 2020, the W-4 no longer uses “allowances.” Instead, it asks for filing status and, if applicable, info about multiple jobs, dependents, deductions, and any extra amount you want withheld, which generally makes withholding more accurate. 1Internal Revenue Service. FAQs on the 2020 Form W-4 For married individuals, the form includes an option for multiple jobs (Step 2) to help prevent under-withholding when combined incomes result in a higher tax bracket. Worksheets and instructions assist taxpayers in estimating withholding needs based on income, credits, and deductions.
Claiming 0: Higher Withholding
Because allowances no longer exist on the current W-4, you can’t literally “claim 0.” If you want higher withholding similar to the old “0 allowances” outcome, you can leave Steps 2–4 blank (other than filing status) or add extra withholding in Step 4(c). This generally means a smaller paycheck but may lead to a larger refund, which some couples prefer to avoid owing at tax time. It can also help married couples with significant combined incomes manage higher tax brackets. For example, if a couple’s income places them in the 24% tax bracket, opting for higher withholding reduces the likelihood of a surprise tax bill.
Claiming 1: Lower Withholding
You also can’t literally “claim 1” on today’s W-4. To get an effect similar to the old “1 allowance” (lower withholding and more take‑home pay), complete the relevant parts of the form: claim eligible dependents in Step 3, reflect deductions in Step 4(b), and avoid adding extra withholding in Step 4(c). This approach can free up cash flow for investments, savings, or expenses.
For married couples, especially those with dependents, adjusting Steps 3 and 4 can align withholding with their goals. The additional cash flow can be directed toward retirement accounts like 401(k)s or IRAs, or to an HSA if you’re enrolled in a high‑deductible health plan.
Adjusting Withholding Down the Road
Tax withholding requires regular evaluation and adjustments. Life events like marriage, having children, or job changes can alter your tax situation, making it essential to revisit your withholding strategy. For example, a significant pay raise might push you into a higher tax bracket, requiring a recalibration of withholding to avoid a large tax bill.
For individuals with variable income, such as freelancers or commission‑based employees, adjusting withholding helps balance cash flow. The IRS Tax Withholding Estimator is a useful tool to model your 2025 withholding and see the impact on take‑home pay, refund, or amount due; use its results to complete a fresh Form W‑4 when needed. 2Internal Revenue Service. Tax Withholding Estimator