According to Kiplinger, claiming zero on a W-4 form means that you are telling the government to take the highest possible amount of taxes from your earnings. This means that you have less money to spend each month than if you were to claim more than zero. However, since you are likely paying more than your share, you are likely to get a refund back come tax time.Continue Reading
Kiplinger notes that those who do not enter zero on their W-4 forms for second or third jobs risk overpaying on their taxes. The IRS is not likely to notice this, meaning these people sometimes have to spend time making a case to the agency later or forfeit the funds. However, people with multiple jobs benefit from withholding additional income from their primary job to avoid underpaying.
Prior Tax recommends that single people with no children claim zero. It also urges married people without children and a combined income falling within the 28 percent or higher tax bracket to claim zero in order to owe less at tax time.
The IRS cautions that those who claim too many allowances on their W-4 forms usually end up owing money in the future, particularly if they are eventually audited. The agency offers a withholding calculator on its website.Learn more about Income Tax