IRS Form W-4: How Many Allowances Should I Claim?

My son recently sent me a text asking, "Is it better to claim 1 or 0 allowances?" He was starting a new job that day, so I instantly knew he needed guidance on how to fill out a W-4 form. That's the IRS form you use to let your boss know how much federal income tax to withhold from your paycheck.

For such a short form (it's less than half a page long), the W-4 can create an awful lot of stress and confusion. It starts off easy enough - name, address, Social Security number, filing status. But then you get to line 5. That's where you have to report the total number of allowances you're claiming. (That's also when you get that puzzled look on your face and ask yourself, "what's an allowance?") You sense that it's an important question - and you're right. Whatever number you write on line 5 will have a significant impact on both your paycheck and your next federal tax return. But figuring out the right number of allowances for you can be tricky. That's why