This guy I know says he claims 9 dependents on his taxes, and then after a few months he switches it to 0. It sounds illegal to me... But he says it's legal, and some of my teacher friends said it was legal too. Is it?
2006-06-10 17:20:13 · 3 answers · asked by bunstihl 6 in Politics & Government ➔ Law & Ethics
If he is changing the number of withholding allowance or exemptions claimed on his W-4, the form you give your employer so the employer can figure out how much to deduct and send the IRS, that's legal. One can change the number of exemptions claimed or the dollar amount withheld as long as the amount withheld each quarter and for the year as a whole bears a reasonable relationship to what taxes are ultimately found to be due on a quarterly basis and for the year.
This is allowed since other aspects of a taxpayer's life may change during the year, for which he or she might wish to change the amount of taxes withheld.
Your friend appears to be adjusting his withholding so he has a larger disposable income early in the year, and a smaller disposable income later in the year.
2006-06-10 17:50:32 · answer #1 · answered by shoshidad 5 · 3⤊ 0⤋
You mean on his I-9's (or whatever they're called), he puts down 9 deductions? I think you can take as many deductions as you want, but when tax time comes you'll end up owing all that money. What is his reasoning?
2006-06-10 18:47:11 · answer #2 · answered by mthompson828 6 · 0⤊ 0⤋
Looks like he might have found a loophole, it looks dodgy to me too.
2006-06-11 02:54:06 · answer #3 · answered by Mummy of 2 7 · 0⤊ 0⤋