Can I have 5 allowances on my Federal Witholding?

Question

I am single and normally withhold 1 allowance. However, I have been having money problems this past month. I was wondering if for one paycheck, I can up my allowance from 1 to like 3 or 5. I did some calculations and this would give me an extra $100 on my paycheck. I would then switch it back to 1 for the rest of the year. Is this a wise choice or will it end up hurting me at the end of the year?

I feel I should add a few notes...
1) I process payroll...so changing it isnt a hassle at all and it takes about one second.
2) I normally recieve about a $400 refund each year. I realize that changing it will lower my refund but I cant imagine that it being only one paycheck..it would effect it that much. Right?

My main concern is the IRS....and having to deal with them. I am single, I dont have kids, I dont really have any deductions. So, techincally, yes, I should only be claiming zero or one. I just want to make sure, that this one time change wont get me in trouble.

Thanks so much for your input thus far! =)

Answer 1

Technically, the IRS does not allow you to claim any more than the number of allowances you are entitled to claim. Use the worksheet on a form W-4 to see what that maximum number of allowances is for you.

That being said, if you fill out a new W-4 to increase your allowances (and decrease taxes withheld) and give it to your employer, then your employer must make the changes to your payroll records. Your employer should not ask for any justification for the change, nor must it send a copy of the W-4 to the IRS.

But would you get in trouble with the IRS? Depends.

Do you usually receive a large tax refund when you file your taxes? If so, reducing your withholding may just reduce your next tax refund.

Do you usually owe taxes when you file? You may end up with a big bill when you file your taxes. (Also could happen if you reduce your withholding too much or for too long.) You may even be assessed a penalty by the IRS if you owe 10% more than the tax that was withheld from your paycheck during the year.

Answer 2

My daughter is single and she decided to change her W4 from 0 to claiming 1 allowance and she got a little more on her paycheck which made it much easier for her to pay her bills. However, last year when she claimed 0 the whole year, she barely got back a refund so hopefully by claiming 1 she will break even and not owe anything. That's what I would worry about if I were you--switching from 1 allowance to 3 or more allowances may not be the best thing tax wise.

Also, the payroll dept probably would not let you just switch your W4 for one month and then change it back. Once you change it, it takes 1 or 2 pay periods for it to go into effect (at least it did for my husband) and it is extra work for human resources to have to submit the paperwork to the payroll dept in order for it to get processed, ect. Maybe if you were at a small family type business they would not mind doing that for you, but in general I think once you change it you will need to wait several months before you can change it again. I really don't think 1 month would make that much of a difference anyway, would it? Since half the year is already over, maybe you can just go ahead and switch it out for the rest of the year if it will help you that much. :)

Answer 3

I think that you can claim up to 9 exemptions without a problem. Not knowing what your pay is, I'd say that an additional $100 in one check would be a lot, are you sure ?

Your employer may not allow you to change it back and forth.
The less that you have withheld now, will cost you when you file next year, but IF you are paying high interest on credit cards or loans, it may make sens to pay the debts down now, and deal with the IRS later. Their interest is less than high credit cards.
HOWEVER you don't want to get into trouble with the IRS.
If you normally get a refund from the IRS, changing your exemptions for ONE paycheck shouldnt cause a problem however it will create a bit of extra work for your employer, so ask them.
You may be able to get $100 advance and avoid the change.
Good luck, hope this helps.

Answer 4

A one-paycheck change isn't going to "get you in trouble". But if you have $100 less deducted, then if you get a refund at the end of the year, it will be $100 less than it would have been - and if you don't get a refund, then you'll owe an extra $100.

Answer 5

If you do this for a few paychecks, it won't be that big of a deal.

That being said, you should claim 1 exemption for every $3400 in deductions that you plan on having.

In your situation, as long as no one else can claim you as a dependent and you don't itemize, you can safely claim 2 exemptions and still have a small refund. If you want to owe, you can claim 3.

Answer 6

it depends on if at the end of the year you usually owe taxes or get a refund - if you normally get a refund it shouldn't be a big deal - but I'm not sure you can make changes two months in a row - maybe it's my employer but they only let me change it every three months

Answer 7

you can have your payroll dept increase/decrease how much gets taken out of your paycheck any time you want. Just got to make sure that you have enough withheld over the course of the year.

Answer 8

The more important question is what you will be making this year. Single, zero is the correct choice, if your parent are able to claim you. For that to happen next year, if you make more than $3500, you will almost have to be a full time student, given your age. If your parents can no longer claim you, single one is the correct choice.

Answer 9

Ask the payroll dept. if they would just not withhold any federal taxes on this check. If you have kids, you should still get a nice refund. (Kids=tax deductions!)

Answer 10

It doesn't work that way. You fill out a W-4 once a year.