Timeline for How can I adjust tax withholding so that I don't get a large Tax Refund?
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| Oct 1, 2014 at 2:36 | comment | added | Kevin Fegan | @Jacob - For completeness (since this doesn't seem to apply to the OP)... you are also exempt from the penalty if you had no tax liability for the previous year. This page has more information than the previous information I linked to: IRS Publication 505, Chapter 4, Underpayment Penalty, Exceptions. | |
| Oct 1, 2014 at 2:07 | comment | added | Kevin Fegan | @Jacob - You're talking about The penalty for underpayment of estimated tax: "Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits. Or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller". IRS Topic 306 - Penalty for Underpayment of Estimated Tax. | |
| Oct 1, 2014 at 1:23 | comment | added | tpg2114 | The IRS has a calculator for this: apps.irs.gov/app/withholdingcalculator I usually check in around July to see how much to adjust my withholdings for the rest of the year to get as close to 0 as I can. Just don't forget to change it back in January... | |
| Sep 30, 2014 at 22:24 | comment | added | Jacob | The only risk you face in doing this is if you owe more than $500 to the IRS at year end you have to pay a penalty. | |
| Sep 30, 2014 at 20:56 | comment | added | Ben Miller | @karancan Sorry, I don't know anything about taxes in Canada. | |
| Sep 30, 2014 at 20:43 | comment | added | karancan | Any idea if the same principle applies to Canada too? | |
| Sep 30, 2014 at 13:48 | history | answered | Ben Miller | CC BY-SA 3.0 |