An employee who is married and has two children submits a W-4 form to his employer indicating that he is singl

Question

An employee who is married and has two children submits a W-4 form to his employer indicating that he is single and claims zero deductions.
Is this action ethical, unethical, or illegal?

Explain your reasoning.

Answer 1

Both legal and ethical.

You can literally submit what you want. He wants to pay higher tax, and it is his call. It is only illegal to use a differant status on your yearly tax return.

Answer 2

As federal withholding is greater for an employee claiming single and zero, than for a married individual with children, this W-4 presents no ethical or illegal actions.

Because the company can have no idea of an employees other income & tax needs, the IRS could care less if an employee has his employer withhold more taxes than his filing status allows.

In the reverse though, it becomes a problem, as you would be underwithholding. Also, the IRS must be notified if an employee claims more than 9 exemptions on his W-4, otherwise the IRS never even sees an employee's W-4.

Answer 3

Another possibility that no one has mentioned yet: he wants the maximum amount of taxes witheld because the job is a 2nd or 3rd job and he's starting out in a higher tax bracket. The income from his first job would take care of the income made in the lower tax brackets, and the lower rate of tax. This is an unorthodox way of dealing with taxes from a 2nd job (usually people tell the 2nd employer to act as if $XX,000 were going to be earned in the first job, a typical situation if one changes jobs in the middle of the tax year), but it can work.

Still another possibility: it's an unorthodox way of paying estimated taxes. This is a bit more dangerous, because estimated taxes on extra income ( a windfall, closing a profitable investment) are supposed to be paid in full by 2 - 6 weeks after the end of the current quarter. If he could't pay it immediately, he might be taking it out of his paycheck. He needs to get it paid in full by the deadline. I'd give him the benefit of the doubt.

Answer 4

To my knowledge, it is not unethical or illegal. The person wants enough deductions taken out of his pay check in order not to have to come up with money at tax filing time. In fact, it's rather like a savings account as he'll most likely receive a refund.

Answer 5

It's legal AND ethical. Claming 0 deductions means he's getting the maximum amoutn of taxes taken out of every check. He's essentially giving the government a free loan every payday of his money. He'll get it back when he files his taxes. Many people claim less deductions so they're 'safe' and dont have to worry about paying extra income tax at the end of the year.

Answer 6

This is perfectly legal. All the W4 does is inform the imployer on how much taxes to withhold. In this case, showing single filing 0 deductions he or she will have the highest amount of taxes withheld from his or her earnings. If he or she has put married filing 4 (1 for himself, 1 for spouse, and 2 for children) he would have fewer taxes taken out.

Answer 7

If his wife works, and she claims the children as dependents, it's no problem whatsoever. It may well be that having her claim the children works better, in tax terms, for the family than having him claim the deductions.

Once a while you need to think about all of the possibilities before judging others.

Answer 8

Nothing illegal about it He wants a bigger tax refund , which is the only way some people can save money

Answer 9

I learned much from your question and the answers.