2007-12-29 22:20:49 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
If you owe at filing time both can cause you some grief. However if you claim 11 and owe less than $1,000 (among a couple of other safe harbor exceptions) there won't be any penalties. That's not necessarily the case if you claim EXEMPT on Form W-4 and wind up owing since you can be tapped with a $500 penalty for filing a false EXEMPT declaration.
When you claim EXEMPT you are swearing under penalty of perjury that:
1. You had $0 tax liability for the prior tax year and received a refund of ALL income taxes withheld.
2. You reasonably expect to have $0 tax liability in the current tax year.
If both of those satements are not true the $500 penalty can be applied by the IRS.
If you claimed 11 withholding allowances and owed less than $1,000 at filing time your W-4 claim would be valid and no penalty would apply.
2007-12-30 03:05:08 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 1⤋
When you filled out the W-4 worksheet, did you actually come up with 11 allowances?
If you file a bad W-4 and end up owing more than $1000 in taxes (and also can't pay), the IRS made send your employer a lock-in letter. The lock-in letter typically tells them you can file single/2 and can only change to single/0 or single/1 without IRS consent.
2007-12-30 03:13:49 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Most definitely not....you need to go talk to a professional...
2007-12-29 22:23:28 · answer #3 · answered by Anonymous · 0⤊ 0⤋