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Financial Planning / Tax Strategies


Subject:  Re: Tax Bracket? Date:  12/17/2001  8:50 PM
Author:  lorenzo2 Number:  56088 of 127616

I would have to respectfully disagree with the comment "you don't have to worry about it". You could be hit with an underwitholding penalty if you don't have enough withheld, and it can happen. (I know because it happened to me once, and my employer sure as heck didn't pay it.) Forewarned is forearmed. Plus, with a little planning you can get your situation pretty close to where you want it (as in small refund, small payment, larger payment, whatever). Pays to do a little homework, IMHO.

If you fill out the form (W-4) properly, your withholding should be close to bang on correct. But I agree that it pays to look at your first paystub, project what your full year withholding will be, and see if it's roughly correct. As for the original poster, he's almost certainly in the clear. He said this was his first salaried job, from which it's reasonable to infer that this is his first tax return. There's no penalty, no matter how badly you're underwithheld, if you had no tax liability the previous year.
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