Dear Sweeny,




From,
The Outpost

 

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so let me get this straight....

its legal to have 0 taxes taken out of your paycheck every week, or whenever you get paid?
invest the money instead and then pay large amounts at the end of the year, provided you cant deduct enough to make your taxable income =0?


so if i made 100k/year, i dont have to let the government take taxes out of my paycheck so long as im prepared to pay at the end of the year?
and then, i dont have to pay at the end of the year if i can come up with enough deductions to eliminate any taxable income, on paper?

 

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You should be able to select your exemptions. You can select an option saying you're completely exempt but depending on how much you make the IRS may send you nasty letters for doing it.


Just by maxing out your exemptions you should be able to get rid of most of the automatic deductions from your paycheck.

i never thought that was legal.
i would always look over my shoulder like i expected to be carted off to jail for claiming the 2 i do claim


so i could go in tomorrow and adjust my exemptions up to 4 or even 8?
whats the maximum before they start getting nosey into my file?

 

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Sweeny, let me give you a piece of advice or two.

1) Be able to admit you don't know and seek out people that do know. (This goes for everything in life)
2) Be prepared to pay for that knowledge unless you choose to learn it on your own. (Again this goes for everything in life)

The beauty of the internet is there is a wealth of knowledge out there mostly free of charge if you are willing to invest your time.

HTH

PS. Your assumptions in this thread are incorrect and I am not willing to teach you properly.

 

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why wouldn't you help the US by giving them an interest free loan? You a commie or something?

Just a clarification. 401Ks are taken from pretax income and taxed when you withdraw it in retirement.

Roth IRAs are taken from after-tax income, but your withdrawals (including interest) will be tax-free when you withdraw them in retirement.

I think the max is 9.

All you are doing with exemptions is to try and match up your taxes withheld with the taxes you owe at the end of the year. It is an estimate only and will vary greatly depending on your situation.

Example: You work a second part time job and have no deductions.

On the 2nd part time job, they take out no/few taxes, but when you add it to your primary job income, you are going to be taxed at a much higher rate and will end up owing money at the end of the year.

In that case, you may need to lower your exemptions and/or ask to have additional money taken out each week to balance out.

In your case, since you have a ton of deductions, you should increase your exemptions and lower the amount they take out each week. Monitor it on a quarterly basis to see that your projected taxes and your withheld taxes are fairly close.

If you are falling behind(or still paying too much), you can adjust exemptions again.

If you have no taxes taken out at all and you owe a significant amount of taxes at the end of the year, you may pay a penalty, which is why you should monitor it.

Here's the IRS info on it. Looks like if you underpay by less than $1000, there is no penalty.

http://www.irs.gov/publications/p505/ch04.html

This thread is what is wrong with our country. Nobody saves for tomorrow. That refund should be saved and invested. Instead you will blow it, then bitch tomorrow that you don't enough money for health care, retirement, whatever. Pretty sure you'll be back bitching about the people who have money and you don't. Your problems begin with you.

Not really sure how you can say that SixSix when the only person not saving for the future is getting reamed by everyone else who does.

But you're right, this thread does exemplify a major issue with the country - people ignore facts.

 

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