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Frequently Asked Question Concerning Form W-4

Why does my employer withhold so much?

Your employer has no discretion over how much they withhold from your pay.

Your employer must withhold the amount from the IRS withholding tables, based on your pay, the time period, and the information on the Form W-4 you filled out.

What’s a withholding allowance?

A withholding allowance is a number that your employer uses to determine how much federal and state income tax to withhold from your paycheck.

The number of exemptions you should claim may vary from zero to as many exemptions as necessary to have the correct amount of income tax withheld from your pay.

Is a withholding allowance the same thing as a dependency exemption?

No, a withholding allowance is not a dependency exemption, even though they are loosely related.

The size of a withholding allowance is based on the annual value of a dependency exemption. For 2014, that amount is $3,950.

Some people assume they can only claim as many allowances as they have children. This is not true.

Having more children probably means you need to claim more allowances, however other factors can affect the optimum number of allowances you should claim, such as other income, deductions, or tax credits.

How do allowances affect my paycheck?

The more allowances you claim, the less income tax is withheld from your pay. Fewer allowances mean more income tax withheld from your pay.

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