Fed tax paid for 2001 was 7865. Fed tax estimate for 2001 based on AGI estimate is calculated to be 18,856 using 14645+30.5% over 65550 formula (AGI less than 150,000.)2001 Fed tax witheld to date is 6154.

1. If I withold 7865 this year, would I owe any penalty in April? (I understand there would be a huge tax bill, but about 1,000/month accumulated at 4.0% for 7 months is over 200 in interest.)

2. Since my W-4 is 0 exemptions now (2 separate income sources), they are taking a lot out, how many expemptions can I claim, and what is the best way to calculate it, to try and have them only withold 1,711 for the rest of the year?

Thanks very much.

Fed tax paid for 2001 was 7865. Fed tax estimate for 2001 based on
AGI estimate is calculated to be 18,856 using 14645+30.5% over
65550 formula (AGI less than 150,000.)2001 Fed tax witheld to date is
6154.

1. If I withold 7865 this year, would I owe any penalty in April? (I
understand there would be a huge tax bill, but about 1,000/month
accumulated at 4.0% for 7 months is over 200 in interest.)

No, you don't even have to file form 2210 as you meet the past year's tax safe harbor with withholding and no estimated payments.

2. Since my W-4 is 0 exemptions now (2 separate income sources),
they are taking a lot out, how many expemptions can I claim, and what
is the best way to calculate it, to try and have them only withold 1,711
for the rest of the year?

Get a W-4 and instructions. Determine number of exemptions to accomplish this over the remaining paychecks, sign and submit to payroll office. Number of exemptions is immaterial even if IRS flags it due to excessive number. ed

what is the best way to calculate it, to try and have them only withold 1,711 for the rest of the year?

First the W-4 won't help you. It tries to withhold the tax due and ignores the safe harbor. Since you know the exact amount you need withheld you should get IRS Publication 15T. It's what your payroll department uses to calculated withholding. Look through it with your salary and various numbers of exemptions to find the dollars that will meet yor withholding needs absed on the number of pay periods left.

Another thing you can do is wait until your withholding reaches the correct yearly total and then claim 99 exemtions.

Try using the following website to calculate the exact amt you want deducted each paycheck depending on the number of payperiods left and your allowances on your w-4:

http://www.paycheckcity.com

Hope it helps...

S

One safe harbor is 110% of last year's tax. So a total of 8652 withheld this year should keep you out of trouble. Tell payroll how much in dollars you need withheld.

mldorsey1 said:

One safe harbor is 110% of last year's tax. So a total of 8652 withheld this year should
keep you out of trouble. Tell payroll how much in dollars you need withheld.

Poster said his AGI last year was <$150K so his safe harbor is 100% of last year's tax withheld this year. ed