Is it true that I can request a certain amount (set amount) be deducted from my paycheck? As an example, request that the amount be $75.00? This would be the same for all my pay checks. If I can, what are the advantages/disadvantages of this?
2007-04-16 14:18:44 · 5 answers · asked by gatherusin 2 in Business & Finance ➔ Taxes ➔ United States
On a W-4 there's a place to direct your employer to deduct a specified additional amount from each paycheck over and above the withholding calculated from however many allowances you claim.
2007-04-16 14:23:31 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
You can file a form W-4 (available in pdf format from the IRS web site www.irs.gov) with your employer. I think it lets a person set a specific amount to be withheld in addition to whatever's already being withheld. But by all means look it over. I may be remembering wrong.
The advantages of this, if you indeed can set it at a certain dollar amount and leave it, is that you'd know automatically what your take-home pay would be every time.
The disadvantage of this is that if you are under-withheld on your federal income tax, you could owe penalties in addition to any taxes you might have to pay with your federal and possibly state tax returns.
2007-04-16 14:27:31 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Your employer is required to take out the minimum amount of taxes (federal, state and local if applicable) as well as social security and medicare. You can't change that except by the number of exemptions you claim (the more exemptions, the less tax taken). However, you can choose to have additional taxes withheld if you don't think you're paying enough. This is particularly the case if you are married and your spouse isn't getting enough withheld and then you end up owing taxes at the end of the year.
2007-04-16 14:24:29 · answer #3 · answered by carinyosa99 3 · 0⤊ 0⤋
Yes. go to your HR department or your payroll department ask them that you want to re-do your W-4.
Your w-4 has the number of dependents that your company should assume when withholding your taxes. You can also tell them to withhold more or less taxes (you can not have them withhold nothing... I forget the issue but there is one). You can also tell them that you have a different number of dependents than you really have.
The benefit of that is getting a smaller (or larger) refund every April. If you want to hold onto your money all year, rather then giving it to the IRS and have them give it back to you in April change your W4.
The disadvantage is that you have to predict your full year taxes at the beginning of the year. If you pay the IRS substantially less then what you own them, you may have to pay quarterly taxes next year.
luck
2007-04-16 14:28:02 · answer #4 · answered by thevoiceofreason2b 5 · 1⤊ 0⤋
MUST BE YOUR FIRST JOB. WE PAY TAXES BECAUSE WE WANT EVERYTHING HANDED TO US ON A SILVER PLATTER.. IT IS THE WAY OF LIFE IN AMERICA THAT SOME PEOPLE DON'T UNDERSTAND THAT FREEDOM IS NOT FREE.
2007-04-16 14:24:33 · answer #5 · answered by charliefoye 2 · 0⤊ 1⤋