[Individual] Figure out your withholding allowances in Form W-4 --1(Jan-31-2011, 78 days left)

First method: Using Form W-4 worksheets

Personal Allowances Worksheet

Exemptions	One exemption brings you one allowance For details see : How many exemptions can you claim
Only one job	If any of the following apply , you can claim an allowance: You are single and you have only one job at a time You are married, you have only one job at a time, and your spouse does not work Your wages from a second job or your spouse's wages( or total of both) are 1,500 or less
Head of household filing status	For details see: Understand your filing status
Child and dependent care credit	If you expect to claim credit for at least 1,800 of care expenses. Qualifying expenses are those you pay for the care of your dependent who is not able to care for himself/herself so that you can work or look for work.
Child tax credit	For details see: Child Tax Credit

Deductions and Adjustments Worksheet:

• Make sure use each amount you reasonably can expect to show on your return. Do not use more than:

The amount shown on your 2009 return + Any additional related amount that you can prove has happened or will happen

• Here nonwage income means your estimated total nonwage income (other than tax-exempt income). It includes interest, dividends, net rental income, unemployment compensation, alimony, gambling winnings, prizes and awards, hobby income, capital gains, royalties, and partnership income.

Two-Earners/Multiple Jobs Worksheet:

• Multiple Jobs: you only need finish one set of worksheets and split your allowances between the Forms W-4 for each job.
• Married Individuals filing jointly: you and your spouse work on one set of worksheets and split your total allowances between you and your spouse Form W-4.

• Married Individuals filing separate return: you should use separate worksheets based on your own individual income, adjustments, deductions, exemptions, and credits.

Supplement: Alternative method

You determine your allowances based on 3 things (withholding schedules, tax rate schedules, and the estimated tax worksheet). It will take into account the items of income, adjustments to income, deductions, and tax credits.

PSQ

Source: http://www.irs.gov