<prompt> Human: I put 2 for allowances on my W-4 at the beginning of the year, one for no one claiming me as a dependent and one for being single and having one job. Today, I used the IRS Withholding Calculator and it said that I would owe about 500 in taxes for the year. Why are my taxes paid so far off from what I owe if I filled out the W-4 correctly? I will have enough money to pay for this so thats of no concern. Im interested in updating my W-4 for 2018 and beyond so there wont be such a large discrepancy. Should I put 1 for allowances so more federal taxes are withheld? If so, how much more taxes are withheld from dropping one allowance?  <response>: Im not sure how much your salary is or what your overall tax liability is, but 500 for me would not be a huge discrepancy.Putting down 2 as a single independent person with no dependents and no itemized deductions is usually the right number but has a chance of you owing.Putting down 1 in the same situation also is ok, but with a chance of being owed a refund.Seldom is it ever going to be dead even.In this case Id just leave it as is cuz Id rather owe a small amount but underneath the under payment penalty than get a refund.However, if you dont like this, then yeah change it to one. Each allowance you add counts as treating 4050 this value can change every year as non taxable income with regard to withholding. So for some quick and dirty math, if you assume youre in the 25 tax bracket youd expect them to withhold about 1000 more over the course of a year, turning a 500 debt into a 500 refund. That may not be the exact case for you, but its the gist. 