How can I use my Tax with-holding Rate to manage a Work-Comp injury that my employer is contesting?

Question

I have a VERY unexpected surgery for a work related injury that My employer is contesting the validity of.

Can I change the with-holding of my tax rate while I am still on light-duty, to 'save' money for my surgery/leave? I have a good 401k w/ my employer that I want to defer 10% or more of my pre-tax earnings to. I have about $4k in outstanding credit that I won't be able to pay, if I'm not working. My family probably won't be much help, they don't have much money.

I make $14/hour, paid bi-weekly & take home about $815. I currently need about $1500/mo. to live on for rent and fixed expenses. i.e. rent, food, gas, insurance, bills

Can I change my with-holding Rate w/o giving myself a BIG tax headache at the end of the year?
Who can I call to get advice about how to better manage this Work-Comp fiasco, so I can get my surgery, heal, and get on with my life?

This is SERIOUS, so please, no cutesy One-line answers, not this time.
God Bless you for helping!

Answer 1

I can help you with your w/ holding. go to www.IRS.gov towards the bottom of the page click more tools. than click on irs withholding calculator. Answer the questions. At the end it will tell you how many to claim so you can get more in your check and do not pay in at the end of the year. I do this with mine and my husbands check so we get more money through out the year than waiting until the end of the year. And yes you can change withholding when ever you want and as many times as you want. Also remember as long as you pay something on your surgery bill a month (it can be as little as $20.00 a month) they can not do anything. I went through the same thing. Also talk to a lawyer. the first visit it usually free. Good Luck

Answer 2

Not really. If you change your withholding you'll run the risk of underpaying your taxes for the year. The fact that you won't be earning money during your hospitalization and recovery will reduce your tax liability and the related withholdings. If you cut the withholdings any lower without something to offset the income (like medical expenses) then you'll be setting yourself up for a hard fall with the IRS if have a tax bill at the end of the year.

If worst comes to worst, you can go bankrupt and clear medical bills. But a tax bill lives on past bankruptcy and can haunt you for years.

Answer 3

Yes, you can change it weekly if you want .. fill out a new w-4 that you can download form irs.gov and turn it in to the payroll department ..

If you itemize on your return you can claim your medical bills so that should not be a problem.

Do you have any dependants? When you go back to work increase your deductions extra to even out at the end of the year!
Good Luck!