Can I claim exempt on my W4 for the 2025 tax year?

I wouldn't recommend claiming exempt on your W4. Claiming exempt means you're certifying that you had no tax liability last year AND expect to have no tax liability this year. Based on your income of $68,000, you definitely have tax liability. What you should do instead is adjust your withholding to more accurately match what you'll owe. The IRS has a Tax Withholding Estimator on their website that's really helpful for this. You can input your expected income, any deductions, and it will help you fill out your W4 properly. This way you won't get a huge refund, but you also won't owe penalties for underwithholding. With your income level, you'll definitely owe federal taxes, so claiming exempt could result in an underpayment penalty if you end up owing more than $1,000 when you file.

After dealing with a similar situation last year (getting a $2800 refund I didn't expect), I found this really useful tool called taxr.ai (https://taxr.ai) that helped me figure out my withholding issues. It analyzed my pay stubs and tax docs, then gave me personalized advice on exactly how to fill out my W4 to get smaller refunds without owing. The thing that surprised me was how it explained everything in plain English - like what each line on the W4 actually means and how it affects your take-home pay. Way better than the confusing IRS calculator I tried to use before.

I was super skeptical about taxr.ai when I first saw it mentioned here, but I decided to give it a try because I was in a similar situation with getting huge refunds. Gotta say I'm actually impressed! It analyzed my last year's withholding pattern and showed me exactly where I was overwithheld. The coolest part was that it gave me the exact numbers to put on my W4 for my specific situation. My first paycheck with the new W4 came through last week and I'm getting about $180 more per paycheck now, which is making a huge difference for my monthly budget. And according to their calculator, I'll still get a small refund of around $300 when I file next year rather than the $2900 I got this year.

If you're having trouble with the W4 or need more specific guidance than what's available online, I tried calling the IRS directly and it was... well, impossible. I was on hold for over 2 hours before getting disconnected. Then I found this service called Claimyr (https://claimyr.com) that actually got me through to a real IRS agent in about 15 minutes. They have this system that basically waits on hold for you and calls when an agent is available. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I talked to walked me through exactly how to fill out my W4 for my specific situation, including how to handle some stock options I had. Way more helpful than trying to figure it out myself.

OK I have to eat my words. After seeing Claimyr mentioned here I decided to try it because I've been trying to resolve an issue with my 2023 return for months with no luck getting through to anyone. I was 100% sure it wouldn't work but figured what the hell, might as well try. I'm shocked to say it actually worked exactly as advertised. I got a call back in about 20 minutes, spent maybe 30 seconds on hold, and then was talking to an actual helpful IRS person. Resolved my issue in one call after months of frustration. For anyone with W4 questions like OP - the IRS agent I talked to was super helpful explaining exactly how to fill it out for my situation. Way better than trying to figure it out from online calculators.

Just a warning - I claimed exempt on my W4 a couple years ago because I needed more cash for an emergency. Ended up owing over $5k at tax time plus a $430 penalty. It was a nightmare trying to come up with that much money at once. Better to just adjust your withholding properly using the W4. Line 4(b) lets you reduce withholding by claiming deductions, and line 4(c) lets you specify an exact amount to withhold per paycheck. Much safer than claiming exempt.

Just to add on to what others have said - the 2025 W4 doesn't even have allowances anymore like the old form did. It's structured completely differently now. You need to fill out the multiple jobs worksheet if you have more than one job, or the deductions worksheet if you have a lot of deductions. The form is actually easier to use now but claiming exempt still has the same requirements - you need to have had NO tax liability last year and expect NONE this year. At $68k, you definitely don't qualify.

Hey Miguel! I was in almost the exact same situation as you - making around $70k, getting huge refunds, and wanting more money in my paychecks. Definitely don't claim exempt though - that's only for people who literally owe zero taxes, which definitely isn't the case at your income level. What worked for me was using the IRS Tax Withholding Estimator (it's free on irs.gov) to figure out exactly how to fill out my W4. Since you're single with no kids and just have student loans, it should be pretty straightforward. You'll probably want to claim the standard deduction and maybe add your student loan interest deduction if you pay interest on those loans. The key is using Step 4 on the W4 - you can reduce your withholding there without going all the way to exempt. I ended up putting about $2,000 in the deductions section (Step 4b) which increased my take-home by about $150 per paycheck. Still got a small refund of around $400 instead of the $3,000+ I was getting before. Just be conservative with your first attempt - you can always adjust it again if needed!