Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 5
I'd claim the 23. It will be reported to the IRS. They will look closely at your return for 2004. Let 'em.

Several years ago I started a new job in August. I'd previously been self-employed and changed to employee status, meaning that I'd already paid most of what my social security deduction should be for the year. Now my new employer was going to deduct social security, the result being, unless I did something about it, a big interest-free loan for the government.
I calculated what my taxes for the year should be (relatively easy, since now my salary would be a known entity) and asked the human resources people how many deductions I should claim to pay a certain amount of withholding each check. Answer was about 15. I'm married, filing joint, no other dependents. I claimed that number. In December I put the number of dependents back to 2, effective January 1. I got a refund of $15 or something like that when my taxes for the year were filed.
If the IRS had come, asking questions like how did I arrive at that number of exemptions, I'd have told them, and let them look over my calculations.
You paid a slug of withholding on your bonus check. Effectively you paid taxes in advance. You are entitled to pay lower taxes for the remainder of the year. Go for it.
If they've got questions, you've got answers. Claim what you are entitled to, after double checking the numbers and being sure the calculation is correct.
Best wishes, Chris
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.