Changing your tax code at the last minute???

Question

A lady I used to work with told me that she would claim 4 on her w forms and then a little bit before tax season she would change it to 0... Legality of this?? Does it work??

Answer 1

You can change your W-4 form whenever you want. All the form does is adjust your income tax withholding. What sometimes happens is that upon reviewing their finances toward the year end, people realize that they're way underwithheld, and they'll increase their withholding at the year end to avoid tax penalties. The IRS assumes that withholding is paid evenly throughout the year, so paying more in the fourth quarter of the year can make sense if a taxpayer knows they're coming up short.

The method your former co-worker is using is perfectly legal and can work, but you basically need to do your tax return to see if you're over or underwithheld. If you find that you're consistently underwithheld and owing penalties at tax time, it might be prudent for you to look at your current tax situation and make necessary adjustments to your W-4.

Answer 2

The tax tables for withholdings are screwed up. She can change her withholdings, as long as her 1040 in April is legal.

Answer 3

You can change the number of exemptions at work any time.
What matters is what you declare in your income tax.