Would it be beneficial for me to raise my allowances?

[Neverstop]

Ok so far according to my math I am due for a tax refund next year of about $800. I am currently claiming 2 fed and 1 state exemption. I am single with no dependents and I have been thinking about increasing my exemptions to 3 for fed if at all possible. Is it legal?

At the end of this year this is what the numbers will look like

Gross- $43,517
Fed- $5404
Fica- $58
SS- $2639
Medicare- $630
State- $1550

This brings my taxable income to $33,217 with no 401k or ira contributions. Some online calculators say I am due $800, one said $2000, and one said $3500. If you were in my shoes and were do back $800 would you raise your exemptions to not get a refund? I would rather have my money now.

[MDM]

I have been thinking about increasing my exemptions to 3 for fed if at all possible. Is it legal?

Yes.

This brings my taxable income to $33,217 with no 401k or ira contributions. Some online calculators say I am due $800, one said $2000, and one said $3500.

If the $43,517 is all wages and there are no other deductions*, your federal tax bill will be ~$4,511.  See the case study spreadsheet.

If you were in my shoes and were do back $800 would you raise your exemptions to not get a refund? I would rather have my money now.

Yes, so would I.  In the 15% bracket, increasing one allowance will reduce your withholding in 2016 by $4050 * 15% = $607.50.  As we are already ~5/12 through the year, you could probably increase your allowances by 2 and still owe ~$200 if the changes take effect in June.


*Usually the withholding works out closely if wages are your only income and you take the standard deduction only, so...?

[Neverstop]

Has the irs ever declared it's ok to file for more exemption than you can work out on the w4?

[MDM]

Has the irs ever declared it's ok to file for more exemption than you can work out on the w4?

Although the words are often used interchangeably when discussing W-4s, an "allowance" on a W-4 does not have the same legal meaning as "exemption" on form 1040.

You get only the number of exemptions on form 1040 that the form 1040 instructions allow.  Your withholding during the year should keep you within at least one of the "safe harbors" for avoiding underpayment penalties when you file.  If you don't withhold enough, you pay the penalty.  If you do withhold enough, all is well.

See https://www.irs.gov/publications/p17/ch04.html#en_US_2015_publink100032385.