Difference between claiming 1 and 0

Forum|Forum|4 years ago
June 8, 2022
2 replies
395 views

Is what's taken out of your taxes when you claim 0, 1, 2, etc based on a percent? For example, I'm in the 22% tax bracket ($41k - $89k). If I claim 0, does a certain percent get taken out of my paycheck? And if I claim 1, does a different, smaller percent get taken out?

My intent is to calculate how much more I will see after taxes per paycheck depending on what I claim on my w4.

Michele_H

Level 6

Hi @Nicky_v , You are correct in your assumption of percentages, however they have changed the W-4 to help taxpayers better understand what to withhold based on yearly income. I am attaching a link to a calculator that you can plug numbers into and answer questions to help you better determine what you may want to withhold.

https://turbotax.intuit.com/tax-tools/calculators/w4/

https://turbotax.intuit.com/tax-tools/

I hope these help!

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Nicky_vAuthor

Level 2

Thank you for this information!

However, it doesn't look like I can figure out the percentages before I start my job. For instance, I'm about to start a job, I know what my salary is, but I want to know how much would be taken out if I claimed 1 versus 0. Everything I clicked on looked like it wanted information from a pay stub I don't have yet.

LJane29

Level 6

Hi Nicky-

The W4 has really changed so you really don't claim "0 or 1" anymore. The new way your withholding is calculated is to take each paycheck and multiply it to make it annual pay. Then they figure the tax on the annual pay (less standard deduction and based on your filing status) and then they divide the annual tax back down to a per paycheck amount. The dependents comes down if they also account for potential child tax credits on what you owe.

If you are starting a job mid-year and already had income that can also skew what you are looking for.

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jacobthedrummer

Level 2

I hate that every explanation I can find describes how to manipulate the system. I just want to know the definition of allowances, so I can answer the exact number correctly. Every explanation I find online seems to explain how large taxes leads to a bigger return and vice versa. It's like asking a math question and getting a lecture on creativity. Drives me nuts.

CatinaT1

Level 15

As part of the Tax Cuts and Jobs Act, the IRS and Treasury adjusted the tax withholding tables, which affects the amount of income taxes withheld from your pay. In 2020, W4's were completely redesigned. Exemptions or Allowances are no longer applicable.

My suggestion is to use the IRS Tax Withholding Estimator here.

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