A withholding allowance is a specific number that taxpayers provide to their employer on the W-4 form. This number helps determine how much federal income tax should be withheld from their paycheck. The more allowances claimed, the less tax is withheld, which can result in a larger take-home pay. Withholding allowances are based on various factors, including marital status, number of dependents, and other personal circumstances. It's important for individuals to accurately assess their situation to avoid owing a large tax bill at the end of the year or receiving a smaller refund than expected.