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Level 1
posted May 28, 2025 4:37:43 PM

Optimal allowances for single with 2 jobs

Hi,

 

I am single with one W2 job and a 1099 side hustle. I usually end up with a refund at the end of the year of at least $2000. What would the optimal # of allowances be for me?

0 2 1709
1 Best answer
Employee Tax Expert
May 28, 2025 4:57:26 PM

Since the W-4 form no longer uses "allowances," the way to ensure the highest amount of federal tax is withheld is to effectively tell your employer to withhold as if you have minimal deductions or credits.

Here's how to do it on the current W-4 form:

  1. Step 1 (Personal Information):

    • Select your correct filing status (e.g., Single, Married Filing Jointly).
       

  2. Steps 2 & 3 (Multiple Jobs & Dependents/Credits):

    • Leave Step 2 blank. This ensures that the withholding for your job isn't adjusted downward for potential multiple jobs or a working spouse.
    • Leave Step 3 (Claim Dependents and Other Credits) blank. By not claiming any child tax credit or other credits, you're telling your employer not to reduce your withholding for these benefits, leading to more tax being taken out.

  3. Step 4(c) (Extra Withholding):

    • This is the most direct way to maximize withholding. Enter a specific dollar amount you want withheld in addition to the standard calculation each paycheck. For example, if you want an extra $100 per paycheck withheld, write "$100" on line 4(c). You can make this amount as high as you want.

In summary, to maximize federal tax withholding:

  • Fill out Step 1 with your correct filing status.
  • Leave Steps 2 and 3 blank.
  • Enter a substantial dollar amount in Step 4(c) to request additional withholding each pay period.
     

**Important to Note

  • IRS Tax Withholding Estimator: While you're aiming for the highest withholding, it's still highly recommended to use the IRS Tax Withholding Estimator (www.irs.gov/individuals/tax-withholding-estimator). This tool can help you determine how much extra you should put in Step 4(c) to reach your desired level of withholding without significantly overpaying throughout the year.
     
  • Large Refund vs. More Take-Home Pay: Maxing out your withholding means you'll have less take-home pay throughout the year but will likely receive a larger tax refund. Consider your personal cash flow needs.
  • Review Regularly: You can update your W-4 at any time by submitting a new form to your employer. If you find you're withholding too much or too little, you can adjust it.

Helpful Links:

Please feel free to reach backout with any additional questions or concerns you might have!

Thank you for joining us today and have an amazing rest of your day!

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer.”

2 Replies
Employee Tax Expert
May 28, 2025 4:57:26 PM

Since the W-4 form no longer uses "allowances," the way to ensure the highest amount of federal tax is withheld is to effectively tell your employer to withhold as if you have minimal deductions or credits.

Here's how to do it on the current W-4 form:

  1. Step 1 (Personal Information):

    • Select your correct filing status (e.g., Single, Married Filing Jointly).
       

  2. Steps 2 & 3 (Multiple Jobs & Dependents/Credits):

    • Leave Step 2 blank. This ensures that the withholding for your job isn't adjusted downward for potential multiple jobs or a working spouse.
    • Leave Step 3 (Claim Dependents and Other Credits) blank. By not claiming any child tax credit or other credits, you're telling your employer not to reduce your withholding for these benefits, leading to more tax being taken out.

  3. Step 4(c) (Extra Withholding):

    • This is the most direct way to maximize withholding. Enter a specific dollar amount you want withheld in addition to the standard calculation each paycheck. For example, if you want an extra $100 per paycheck withheld, write "$100" on line 4(c). You can make this amount as high as you want.

In summary, to maximize federal tax withholding:

  • Fill out Step 1 with your correct filing status.
  • Leave Steps 2 and 3 blank.
  • Enter a substantial dollar amount in Step 4(c) to request additional withholding each pay period.
     

**Important to Note

  • IRS Tax Withholding Estimator: While you're aiming for the highest withholding, it's still highly recommended to use the IRS Tax Withholding Estimator (www.irs.gov/individuals/tax-withholding-estimator). This tool can help you determine how much extra you should put in Step 4(c) to reach your desired level of withholding without significantly overpaying throughout the year.
     
  • Large Refund vs. More Take-Home Pay: Maxing out your withholding means you'll have less take-home pay throughout the year but will likely receive a larger tax refund. Consider your personal cash flow needs.
  • Review Regularly: You can update your W-4 at any time by submitting a new form to your employer. If you find you're withholding too much or too little, you can adjust it.

Helpful Links:

Please feel free to reach backout with any additional questions or concerns you might have!

Thank you for joining us today and have an amazing rest of your day!

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer.”

Level 1
May 28, 2025 5:08:20 PM

Thank you so much, Terri Lynn!