How to Calculate Federal Allowance

How to Calculate Federal Allowance
Federal allowances help you minimize tax withholding from your paycheck.

Step 1

Add one allowance for yourself.

Step 2

Add another allowance if you are single with one job, or if you are married with only one job and your spouse does not work, or your wages from a second job or your spouse's wages, or the total of both, are less than $1,500.

Step 3

Add another allowance for your spouse if your spouse does not work and you only have one job.

Step 4

Add an allowance from each dependent you plan to claim on your tax return.

Step 5

Add another allowance if you plan to file as head of household on your tax return.

Step 6

Add another allowance if you plan to claim at least $1,900 in child or dependent care expenses as a credit.

Step 7

Add two allowances if your income is less than $61,000 if single or $90,000 if married, for each eligible child. Subtract one if you have three or more children. If your income is between $61,000 and $84,000, or $90,000 and $119,000 if married, add one allowance for each eligible child and add one additional allowance if you have six or more eligible children.

Step 8

Sum the total allowance from steps 1 through 7. This is the base withholding allowance you place on your W-4. Although all allowances are just an estimate, if you choose to, you can refine this estimate using the Deductions and Adjustments Worksheet and the Two-Earners/Multiple Jobs Worksheet in the IRS W-4 document.