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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Plans for the New Year||Date: 12/21/2000 5:35 PM|
|Author: kaigun||Number: 52099 of 310999|
"Change deduction on federal taxes starting in Jan to 2 so as to get the most money out of my paychecks in the first half of the year to assist in paying off my loans. In june I will take my deductions to 0 so as to even out (roughly) my taxes. I don't want to give the govt an interest free loan for a year agin."
Be careful. If you had to pay taxes (vice getting a refund) last year, and you follow the above plan, you may be subject to penalties by underwithholding. Uncle Sam wants his interest-free loan from all of us, and seeks to ensure that we are al contributing to the kitty. On the occasions when I had to pay in April, I received notices stating that I needed to make sure that either my withholding was increased, or to send in estimated tax payments (quarterly) to make sure that sufficient funds were in my tax account, or else I would be liable for penalties. I do not recall the exact figures, but if the second sentence above applies to you, you might check out the IRS regs, or talk to a tax person.
Better safe than sorry. Good luck.
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