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What are the differences among “exemptions”, “allowances” and “deductions”?

April 26, 2017allowances deductions differences exemptions

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What are the differences among “exemptions”, “allowances” and “deductions”?

2 Answers

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For W-4 purposes, these terms is interchangeable and refer to the number of allowances you can claim. Taxation is based on gross pay versus the marital status and the number of allowances claimed. Allowances does not necessarily mean dependents for tax purposes.

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For W-4 and DE-4 purposes, these terms are interchangeable and all refer to the number of allowances you can claim. Taxation is based on gross pay versus the marital status and the number of allowances claimed. “Allowances” does not necessarily mean “dependents” for tax purposes.