You also mentioned being penalized for not withholding this dollar amount, which is incorrect.

I must be getting terribly sloppy, because I never meant to say any such thing. I thought I said that the penalty applies if you fail to prepay, through withholding and estimated tax payments, a sufficient amount. I've made numerous references to where one can find detailed explanations of what's sufficient, and no matter how much I'm goaded, I'm not going to repeat what those references say.

As I said, no one I know is having additional dollar amounts being withheld and are not being penalized. You also mention "it's the unusual situation that requires additional withholding.". I agree.

Whew!

The penalty is not broadly applied. Only to specific situations.

Huh? The potential for a penalty is there for every taxpayer, and the penalty is charged to every taxpayer who fails to prepay a sufficient amount.

Still, I'm unsure what line 6 of the W-4 means if I'm an employee having taxes withheld per my allowances.

Have you read Jeanwa's response, which said an employee might have a lot of income from non-withholding sources, such as rental income or interest income and choose to have additional tax withheld instead of making estimated tax payments? You could also look at the two-earner worksheet on the W-4, specifically line 9.

I just recalled a comment I ignored earlier, something to the effect that we weren't talking about self-employment. If you're thinking that estimated taxes apply only to the self-employed, you're wrong. Anyone with sufficient income not subject to withholding must make estimated tax payments.

Phil