I was thinking about adding to my Federal withholding for a larger year end tax return. I did read somewhere that you can be penalized for too large a return.
Is this still true? If so how much for a married filer.
Thank you - Radman
2007-09-18 14:22:22 · 8 answers · asked by Radman 3 in Business & Finance ➔ Taxes ➔ United States
While there is no penalty for having a large refund; if your withholding is too large, say over 25% of your wages they might think that there is a math error and correct your return so that it shows no withholding for that job. It would then be up to you to prove to them that the employer put the correct amount of withholding on the w-2.
Most people think that employers send the information to the IRS in January when they issue the w-2 to you. This is not true, the only copy of a w-2 that the IRS receives is the paper copy you mail with the return. If you file electronically they get no w-2.
What actually happens is your employer sends a copy of your w-2 to Social Security. Social Security process them for your social security earnings record then gives IRS a transcript in the early summer (usually June).
2007-09-18 14:49:09 · answer #1 · answered by Charlie & Angie G 4 · 1⤊ 4⤋
it type of feels your organization is withholding taxes out of your bonus, subsequently your refund. If the refund is due on your tax deductions, you ought to evaluate making predicted money. the top-rated value time table might set up a small value for April 15, then the extra beneficial money for something of the 300 and sixty 5 days. that is an extraordinarily cumbersome calculation and while you're happy with receiving a reimbursement, permit that is. after all, in the adventure that your tax money are comparable to final 3 hundred and sixty 5 days, there will be no penalty for underpayment.
2016-10-19 01:22:17 · answer #2 · answered by ? 4 · 0⤊ 0⤋
There is a penalty in the opposite situation, if you have to make too large a payment. There is no fine if you have too large a refund. However, you do not receive whatever interest the money would have earned if you had instead saved it in a bank.
2007-09-18 14:51:56 · answer #3 · answered by StephenWeinstein 7 · 2⤊ 0⤋
No, there is no penalty from the IRS, but it's a penalty from you to yourself, since if you invested that money throughout the year, you'd earn interest (which is taxable). This way, you've given the IRS an interest free loan.
2007-09-18 15:30:06 · answer #4 · answered by Anonymous · 2⤊ 0⤋
That's a rumor that goes around once in awhile, but isn't true. They don't mind taking your interest-free loan to them.
2007-09-18 14:35:46 · answer #5 · answered by Judy 7 · 1⤊ 1⤋
No...they love an interest-free loan from you.
2007-09-18 14:26:31 · answer #6 · answered by Bill 6 · 1⤊ 0⤋
Well, it depends..
2016-09-19 09:41:10 · answer #7 · answered by ? 2 · 0⤊ 0⤋
Thanks for all the answers
2016-08-24 16:33:45 · answer #8 · answered by Anonymous · 0⤊ 0⤋