3

I'm trying to find a table or description of how much each allowance claimed on Form W-4 will reduce taxable income but am coming up short. The closest that I can find is here under the Claiming Allowances section where it states:

In 2015, each allowance exempts $4,000 from withholding

I am not sure if this value has changed from 2015 to 2016, nor am I sure that this amount does not change based upon income.

5

What you want is the document called Publication 15 (Circular E).

It's the IRS document that explains the withholding allowance of $4050 in 2016, and contains the tables that employers use to determine tax withholding for a given income.

The value, $4050, is fixed, but its impact changes based on one's tax bracket. e.g. if you are single, and earn a taxable $100K, the single withholding is worth $4050*.28 (i.e. the change in tax held per allowance claimed), vs for a taxable $35K earner, $4050*.15.

2018 Jan Edit - This question was asked for the 2016 tax year. The link above leads to the latest IRS publication, still for 2017, at this moment. I expect it to update shortly, weeks, at the latest. Another document, Notice 1036 shows the number has been updated to $4150.

  • +1 but please correct "employer's use" to "employers use" :-) – Dilip Sarwate Jan 21 '16 at 16:20
  • Lol. Fixed. I'd like to blame autocorrect. Yes, that's it. – JoeTaxpayer Jan 21 '16 at 16:45
2

It is 4050 $ per allowance for 2016 (https://www.dinkytown.net/java/Payroll.html, far down under 2.)

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