Basically, I need my full gross income for the next few months to handle some large expenses. I want to defer paying income taxes from my paycheck until a later date. I am currently W-2'ed and am paid based on commission. Do I need to change the filing status with payroll? With the IRS? Please advise, thanks!
2006-08-29 08:13:21 · 9 answers · asked by patrick_c_a 1 in Business & Finance ➔ Taxes ➔ United States
To clarify, I'm not looking to completely avoid payment of these taxes; I simply wish to delay payment until a more convenient time (if possible).
2006-08-29 08:24:02 · update #1
Refile a W4 to your payroll department. You can only alleviate yourself from federal and state taxes. You will still have to pay the Social Security 6.2% tax and the Medicare 1.45% tax, these are mandatory taxes. You cannot file for exempt status unless you expect to not owe any tax at the end of the year and you did not owe any taxes at the end of last year. You can however file married or single (whichever you are) and raise the allowances you are claiming to the highest number possible so that the percentage is so low it will never calculate. It all depends on your income level. Go to the irs.gov website and you can look up publication 15 (circular E) Employer's Tax Guide for 2006 to figure out how many you will need to claim so that there will be no taxes taken out of your pay. You do not have to contact the IRS or your State to do any of this.
2006-08-29 08:33:44 · answer #1 · answered by in love with superman 3 · 0⤊ 1⤋
Simply, to stop taxes from being withheld from your paycheck, just file a new W-4 form and claim around 10 exemptions. Since its the end of August, it may take a month or so for the deductions to begin. It depends on your payroll department at work.
The danger is that you may owe a lot of money at the end of the year. If you owe to much, then you (not your employer) will be penalized for not having enough taxes withheld from your paycheck. To avoid this, follow these steps:
1. Review last year's tax return and compare it to what you expect to happen this year. Do you expect any major changes? If so, then be sure to make a note of them. You will need this information.
2. Review your most current pay stub.
3. Do a tax return based upon last year's deductions and this years expected pay. Use the amount of taxes withheld from the most current pay stub as the taxes paid to the IRS. Are you getting a refund? Do you owe? If you owe how much? Is it less than $1000? If yes, then you can claim as many exemptions on your W-4. Is it over $1000? If yes, then you will need to have some more taxes withheld for the rest of the year. You can adjust your W-4, just don't make yourself tax exempt.
2006-08-29 11:50:57 · answer #2 · answered by Steve 6 · 0⤊ 0⤋
You know you will never change your W-2 back to the legal, proper exemption once you get used to the extra money. And I would be surprised if your employer allows you to change it in the first place. All this will do for you is make you have to pay tax at the end of the year instead of getting a refund or maybe breaking even. Then what are you going to do? Find a better resource for whatever you've gotten yourself into financially and learn from it.
2006-08-29 12:06:03 · answer #3 · answered by misslabeled 7 · 0⤊ 0⤋
If insufficient withholding is made from your pay you will be fined at the end of the year. Plus your employer isn't allowed to reduce your withholding if they think you are declaring too many exemptions.
But if you are sure you're going to get a refund next April, you can file a new W-4 to reduce withholding. It's a bit tricky; follow the instructions carefully.
If you have TurboTax you can work it out by computer.
2006-08-29 08:20:29 · answer #4 · answered by Anonymous · 0⤊ 1⤋
You can't. Your employer is required by law to deduct withholding at a certain rate. The only variable are your exemptions.
Imagine the mess if people were able to opt out of withholding. Everyone would and nobody would be able to pay their taxes come April 15.
2006-08-29 08:32:07 · answer #5 · answered by Oh Boy! 5 · 0⤊ 0⤋
Technically, the tax is due once you withdraw the money. you may oftentimes prepare them on how a lot tax to withhold, if any. Telling them now to not withhold taxes isn't against the law, yet in case you do not withhold adequate, you'll owe it at tax time, plus probably interest.
2016-11-23 13:12:17 · answer #6 · answered by ? 4 · 0⤊ 0⤋
File a new W-4 with your employer and claim that you are exempt.
2006-08-29 08:18:23 · answer #7 · answered by Pitchow! 7 · 0⤊ 0⤋
As long as you are working for the taxpayer, you cannot take your gross income - they won't allow it.
Figure out how to not work for the taxpayer, and you'll earn your gross income forever.
2006-08-29 08:19:20 · answer #8 · answered by p_rutherford2003 5 · 0⤊ 0⤋
You can't. What'd ya think this is, a free country? HEHEHE
2006-08-29 08:21:51 · answer #9 · answered by Snogood 3 · 0⤊ 0⤋