Question regarding W2 tax form

[Nocturnal]

You can change your witholdings at anytime, right? Meaning I can go from 0 to say 6 if I wanted to to get more out of my paycheck, right? It is not illegal or frowned upon, correct? It just means I'll have to pay it later when I file my taxes, right?

 

[woowoo]

Correct.
Tell your employer that you want to fill out another W-4 (not w2)

 

[CHJF]

Originally posted by: woowoo
Correct.
Tell your employer that you want to fill out another W-4 (not w2)

YUP

 

[Double Trouble]

You can make changes to your W4 anytime, which will impact the amount that's witheld from your pay for taxes. There's nothing wrong with that per se, but be sure to keep the amount you're going to end up owing at tax filing time small enough to not incur penalties. If the amount you end up owing is larger than a certain percentage of your income or larger then a certain flat rate (dunno of the top of my head what the amount currently is), you'll end up paying penalties.

 

[dullard]

Tagej is correct. You can have them withold any amount (even $0). But there can be a penalty for doing so (2.867% of the amount you underpaid during the year).

Last years 1040 instruction manual says this (P.58):
[*]When you file, if still you owe more than $1000 and it is more than 10% of your total tax, then you owe a penalty. Obviously by setting withholdings to $0 (I assume this is done near the beginning of the year - so if you do it now at the end of the year this might not apply this year but it will next year), you will owe more than 10% of your total tax when you file. The $1000 tax mark isn't hard to hit either if you have a decent paying job.
[*]Exception 1: You don't have to pay a penalty if last year you had absolutely no tax liability. This doesn't apply to very many people.
[*]Exception 2: You don't have to pay a penalty if during the year your withholdings were at least as much as the total tax liability you paid last year. Obviously if you are dropping your withholdings to zero, you are highly unlikely to qualify for this exception.

Form 2210 is all you need.

Example, last year you owed $10,000 in taxes. This year you put your withholdings to $0 and you still owe $10,000 in taxes. You were required in this case to withhold $9000. Thus during the year you underpaid by $9000. Your penalty is 2.867%*$9000 = $258.03.