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When you are hired for a job, you will fill out a W-4 form. This form tells your employer how much money to withhold from your paycheck. This money is for state and federal taxes.
The amount withheld depends on several things: how much money you earn, the number of dependents you have, and if you are over 65 years old or blind. People who live with you and that you take care of are called dependents. These people are counted as “exemptions” on the W-4 form.
The number of exemptions you claim can change. It can change if you get married or divorced. If you have a baby or a dependent dies, it can also change. If your dependent stops living with you, your exemptions can change too.
When you claim the correct number of exemptions, you pay the right amount of tax. If you claim too many exemptions, you will pay more taxes in April. If you don’t claim enough exemptions, more taxes will be taken from your check. You will get a tax refund after April.