The higher the number of allowances claimed on Form W-4, the less in taxes will be taken out of one's paycheck.

Question

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The number of allowances claimed on Form W-4 directly affects the amount of taxes taken out of one's paycheck. The more allowances claimed, the less withholding will be taken out, resulting in a smaller tax bill or a larger refund at tax time. However, it is important to note that claiming too many allowances can result in under-withholding and potentially owing taxes at the end of the year.

The Higher the Number of Allowances Claimed on Form W-4