# U.S Income tax question **URL:** \ **Category:** Factual Questions\ **Created:** [April 24, 2007, 10:00pm UTC](https://boards.straightdope.com/t/u-s-income-tax-question/401523 "2007-04-24T22:00:51Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![Epimetheus](https://avatars.discourse-cdn.com/v4/letter/e/c4cdca/32.png) [@Epimetheus](https://boards.straightdope.com/u/Epimetheus)\ **Post date:** [April 24, 2007, 10:00pm UTC](https://boards.straightdope.com/t/u-s-income-tax-question/401523/1 "2007-04-24T22:00:51Z")
Is it legal to claim exemption even though you don’t qualify? I am thinking I would rather not have any taxes with-held and would rather have 15-25% of my paycheck routed into a savings account where I can earn interest on it and just pay what I owe at the end of the year. I would like this to be true for state and federal. Is this legal or recommended? Do I just write ‘Exempt’ on my W-4 if I wish this? ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [April 24, 2007, 10:09pm UTC](https://boards.straightdope.com/t/u-s-income-tax-question/401523/2 "2007-04-24T22:09:35Z")
Legal? I suppose. The IRS is not going to throw you in jail if you pay in one lump sum at the end of the year. Recommended? Nope. The IRS is going to [penalize](http://www.irs.gov/taxtopics/tc306.html) you if you pay in one lump sum at the end of the year. ---
**Author:** ![gotpasswords](https://avatars.discourse-cdn.com/v4/letter/g/c57346/32.png) [@gotpasswords](https://boards.straightdope.com/u/gotpasswords)\ **Post date:** [April 24, 2007, 10:12pm UTC](https://boards.straightdope.com/t/u-s-income-tax-question/401523/3 "2007-04-24T22:12:21Z")
Bad idea. The IRS will sooner or later figure it out and direct your employer to take proper withholdings. > [@The IRS](#): > > The program is designed to identify individuals who incur tax debt because they did not have their employer withhold sufficient wages to cover their taxes due for the current year. The program identifies those debtors and requires their employers to increase the withholdings. (From [http://www.gao.gov/htext/d0726.html](http://www.gao.gov/htext/d0726.html)) The IRS has an [online withholding calculator](http://www.irs.gov/individuals/article/0,,id=96196,00.html) that can help you find the appropriate amount to have withheld from your paychecks. ---
**Author:** ![David\_Simmons](https://avatars.discourse-cdn.com/v4/letter/d/9de053/32.png) [@David\_Simmons](https://boards.straightdope.com/u/David_Simmons)\ **Post date:** [April 25, 2007, 12:00am UTC](https://boards.straightdope.com/t/u-s-income-tax-question/401523/4 "2007-04-25T00:00:09Z")
I believe you are required to pay at least 90% of the tax owed in any year during that year either by withholding or estimated tax payments. If you don’t, you will have to pay a penalty. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [April 25, 2007, 12:18am UTC](https://boards.straightdope.com/t/u-s-income-tax-question/401523/5 "2007-04-25T00:18:35Z")
[QUOTE=Cheesesteak] Legal? I suppose. The IRS is not going to throw you in jail if you pay in one lump sum at the end of the year. Recommended? Nope. The IRS is going to [penalize](http://www.irs.gov/taxtopics/tc306.html) you if you pay in one lump sum at the end of the year. [/QUOTE] Not quite. It is true that if you just screw up- especially your first year of owing- things won’t be so bad. The IRS might even decide to reverse the Estimated Tax Penalty, if it is a one time thing and you got a refund last year. But if you knowingly and wilfully file a W-4 falsely as “exempt” you could face a fine of $5000 and unlikely but possibly prison time. You can get away with slight underwitholding and writing a modest check every year if your witholding is 90% or so of what you owe. Generally, if it is due to W-2 wages, and not SE income, you might even be able to get away with a little more. Say with “single +1” and you get a refund, “single +2” and you owe a small amount- then"single +3" you _might_ be able to get away with. Of course, you’ll have to pay on 4-15, then. But do **not** file a w-4 with Exempt or 99 witholding allowances or anything like that, if you have an actual tax liability. It will be **BAD**.