If you’re starting a job or if your marital status has changed recently, then you’re probably wondering how to fill out your W-4 form at work. Here’s what you need to know to determine if you should claim 0 or 1 on W-4.
Before you begin to read this post, please note that this is general advice. Only you can determine your circ*mstances and what’s best for your finances. Always check with a tax professional or an HR representative if you aren’t sure what to claim on your tax form. That said, some general guidelines can help you understand what it means when you fill out your W-4.
Editor’s note: To give you the most expertise, I’ve invited H&R Block accountant Richard Herring to address this issue today. Again, although Richard is an expert in accounting, his advice should be taken as a general guideline to help you make informed decisions about filling out your W-4. So take it away, Richard!
Filling Out a W-4
If you’ve received a W-4 form, it can be a little confusing and even a little daunting. What is a W-4? The short answer is that the W-4 is an IRS form. An employee fills out that particular form to claim their allowances after they begin a new job.
This tells your employer’s payroll company how much they should or shouldn’t withhold from your check-in taxes. It also describes the IRS how many dependents you have; and if you should receive child tax credits or benefits from the IRS. You can use the W-4 to withhold extra money from your paycheck too.
When you start a new job, your employer will hand the W-4 to you. Usually, you’ll receive a paper copy. You will be asked to write down how many allowances you want on the W-4 form and the attached worksheet. If you Googled, “Should I claim 0 or 1 on W-4?” then read on.
It’s important to note that the guidelines for claiming 1 or 0 on W-4 have changed in 2024. We will also tell you how it was in the past before 2024, so you will be fully aware of the history.
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How has the W-4 Changed for 2024?
There’s a significant change that’s happened to W-4 forms—for 2024, and you do not use the W-4 form to claim withholding allowances anymore! The W-4 form has been changed for 2024 and looks different than the W-4 forms from previous years. Every so often, the IRS changes the documents to make them more accessible for people to understand and to correspond with changes in tax rules and exemption guidelines.
On the 2024 W-4 form, you can still claim an exemption from withholding. If you happen to qualify for an exemption, you can claim it by writing “Exempt” in the space below Line 4(c). It’s important to note that the exemption is only suitable for a year, and then you will need to fill out another W-4. It would help if you talked to your financial professional before claiming exemption because there are very specific guidelines on when you can and should claim an exemption.
If you add extra withholding on Line 4(c), more will be withheld from your paycheck and earmarked for taxes. In some cases, additional withholding can result in a bigger tax refund at the end of the year (but keep in mind that your paycheck will be less each pay period).
If you have a side job, you can set up withholding on your taxes too. Use the IRS Tax Withholding Estimator to determine how much tax you can withhold. Setting up a withholding will help you, so you don’t end up owing a surprising balance at the end of the tax year.
Should I claim 0 or 1 on W-4?
If you are wondering, “Should I claim 0 or 1 on W-4?” the answer has changed as of this year. Due to changes in the 2024 guidelines, the number (0 or 1) you write down on your W-4 form will no longer significantly impact your paycheck during the year. However, if your form asks for a 1 or 0, take a look at the date on the top of the W-4. Your employer may have given you an older form.
No matter what you fill out, it won’t significantly change your tax refund at the end of the year for 2024. So, it is no longer essential to understand how allowances work and calculate them when filling out the W-4 form. In 2024, you can’t claim allowances on the W-4 form.
In many ways, this 2024 change to tax guidelines makes life much simpler when you’re filling out a W-4.
What Is a W-4 Form Anyways?
As I have mentioned earlier, the W-4 is an IRS form. Your employer usually gives you this form when you begin a new job or if something changes in your life that might affect your tax status (you may need to request an update from your employer).
If you had filled out a W-4 before 2024, you don’t need to fill out a new form, despite the recent 2024 changes to tax laws.
If you want to make changes to your W-4, you can change your withholding amount and exemptions. Note that even if you make changes to the form, you can’t wait until the end of the year and pay all your taxes in a lump sum.
Even though this might seem like a great idea to some people, the IRS will not allow you to do it. Instead, you will need to instruct your employer to withhold enough tax from each paycheck by filling out a W-4 form, or you will need to make quarterly estimated tax payments.
Can I Change the Number of Allowances that I Claim on a W-4?
For 2024, you do not use the W-4 form to claim withholding allowances any longer. It has changed! You might be wondering what it means to claim a 0 or 1 on a W-4, but it’s important to note that in 2024, you don’t use the W-4 form to claim withholding allowances.
This new rule applies whether you claim 1 or 0 on a W-4 form (or anything in-between).
History of W-4 Before 2024
Before 2024, the more allowances you claimed, the fewer taxes were withheld from each paycheck. This meant that you would get more money each paycheck, but in return, you would receive a lower tax refund, no refund, or even a tax bill, depending on the filing status you chose (a 0, 1, or so on).
If you claimed zero allowances on your pre-2024 W-4, the maximum amount of taxes was withheld from each of your paychecks. As a result, you’d likely get a big tax refund from the IRS at the end of the season. But your allowances were not the only factor. You may still have ended up without a refund, or you may have ended up owing the government, depending on your taxable income and other factors in your filing status.
Historically, before 2024, I would have recommended you claim zero allowances on your W-4 form if someone was claiming you as a dependent. If you were struggling to save money for your taxes, claiming zero was also a good idea. You would most likely have received a lump sum at the end of the tax season.
If you were single and someone claimed you as a dependent, then claiming zero on a W-4 would make sense. When someone claimed you as a dependent, they paid less on their taxes because they benefited from your exemption. On the other hand, your taxes might have been a little higher. This didn’t necessarily mean you wouldn’t get a tax refund from the IRS, though. It would depend on your income.
Claiming zero allowances on your W-4 made sense if you were single or if you struggled with saving money. Claiming zero could be helpful if you didn’t have an emergency fund, wanted to pay off debt, or we’re working to save.
When Should I Claim 1 on W-4?
In 2024, it doesn’t matter if you claim 1 or 0 on your W-4. Your taxes will not be affected because you can no longer claim allowances.
In the past, claiming one allowance meant that a little less tax was withheld from your paycheck over the year than if you’d claimed zero allowances. If you were single and had only one job and one source of income, you would most likely receive a refund from the IRS during tax season. The refund would be smaller if you claimed one rather than claiming a zero.
In the past, it was beneficial to claim one allowance, depending on your spending habits. If your filing status was single and you were responsible with money, then claiming one could be helpful. It would allow you to get more money on each of your paychecks than if you’d claimed zero allowances. Having an extra $500 a paycheck because you claimed one was great if you were paying down high-interest credit card debt or had another financial concern.
Any time you get extra money from a paycheck, it’s helpful to pay off debt. If you don’t have a high-interest credit card, put the money in savings or use it towards long-term investments like a 401(k) plan. Even though the 2024 W-4 form has changed, you should still save money whenever possible.
It no longer matters if you claim a 0 or a 1 on W-4. Your taxes won’t be affected anymore. In 2024, you can’t claim allowances, but that could always change again in the future. It’s helpful to understand the history of allowances and know what it meant to claim a one or a zero.
Should I claim 0 or 1 on W-4? The Conclusion
In conclusion, should you claim 0 or 1 on your W-4? It no longer matters because you can’t withhold allowances anymore in 2024. However, if you want a tax refund and you’re nervous about taking enough out of your paycheck (or struggle with saving), then you can withhold extra money online 4(c) of your W-4 form. Each paycheck, that amount will be put aside for taxes. At the end of the year, if you break even or owe less than you’ve withheld, you’ll get a refund!
This is a sponsored post from H & R Block.
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About the Author:
Richard Herring has been an accountant at H&R Block for over 40 years. He lives in the Dallas, Texas area with his wife of over 45 years and their dogs.
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