Withholding Allowance

Withholding Allowance

An allowance an individual claims on a W-4 Form. Your withholding allowances will determine how much money is taken out of your paycheck each time you get paid, so know how to use them to your benefit.A withholding allowance is mainly used to assist an employer in calculating the amount of income tax to withhold from an employee’s paycheck.

The more withholding allowances you can claim, the less you will have to pay in federal income tax each pay period.  This is why submitting your W-4 is so important.  Until you turn this form in, your employer has to assume that you’re claiming zero withholding allowances.
You can claim one allowance for yourself, one for your spouse and one for each of your dependents.