To determine your AGI, you will need to estimate your adjustments to income, which are reported on line 5 of the worksheet.  So you may need to fill in line 5 first, in order to be able to calculate the amount to report on line 1.  Adjustments to income are shown on page 1 of Form 1040 or 1040A.  These adjustments include contributions to an IRA or self-employed pension plan, contributions to a health savings account (HSA) or medical savings account (MSA), tuition and fees deduction, student loan deduction, one-half of self-employment tax, self-employed health insurance deduction, educator expenses, penalty for early withdrawal of savings, alimony payments, moving expenses, expenses of performing artists, net operating loss carryovers, travel costs if you are in the Reserves, jury duty pay given to your employer, and the deduction for clean-fuel vehicles.

Line 5 of this worksheet includes tax credits.  The child and dependent care expense credit and child tax credit are included in the Personal Allowances Worksheet, but they can be included here instead.  In addition, you can include estimates for any of the following credits for which you think you will qualify: credit for the elderly or disabled, mortgage interest credit, foreign tax credit, qualified electric vehicle credit, credit for prior year minimum tax, earned income credit, adoption credit, general business credit, retirement savings contribution credit, Hope credit, and the lifetime learning credit.  Once you have estimated the amounts of these credits, they will need to be converted to withholding allowances.  You can do this by completing Worksheet 7, “Converting Credits to Withholding Allowances”, in IRS Publication 919, “How Do I Adjust My Tax Withholding?”.  This worksheet basically takes your credit and multiplies it by your effective tax rate based on your total income.

On line 6 of the worksheet, you should estimate your income from sources other than your salary or wages, such as interest, dividends, capital gains, and rental income.  The remaining lines of the worksheet should be filled in based on the instructions and calculations indicated.  The result will be the revised number of withholding allowances you can claim on your Form W-4.