Question

Decreasing W-4 allowances will ________ the net pay in your paycheck and ______ your total tax burden.

Answer 1

Decreasing W-4 allowances will decrease the net pay in your paycheck and decrease your total tax burden. If you claim more allowances then less money is held out from your paycheck. This results in a higher net paycheck. The opposite is true if you take less allowances. Your paychecks will be less but you are more likely to receive a larger tax refund when filing your taxes.