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The information OR allowances you enter on the W-4 form tells an employer how much federal (and some state) money to withhold from your paycheck.The money that is withheld pays for federal income taxes.That is why the W-4 is called a "Withholding Allowance Certificate," not a "Withholding Dependents Certificate." Tax Myth: Tax Truth: The only exemptions you list on your tax return are for yourself, your spouse, and one for each of your dependents.However, you can claim allowances for other items on your W-4.
You can claim allowances for other things besides dependents (see list of W-4 allowance items above).
That way, you: You might want to increase your allowances.
However, if you increase your allowances too much, you will end up owing taxes at the end of the year because you did not have enough money withheld. Whatever you do not owe in taxes you will get back in the form of a tax refund.
Furthermore, the value of a dollar will be less next year than it is now, due to inflation.
You might want to consider balancing your withholding.