A third of my yearly income comes in two paychecks in the second and fourth quarters of the year. The federal tax on these two paychecks more than adequately covers my total tax. Even if I don't pay federal tax on my regular monthly paychecks, my tax return is an equivalent of a whole paycheck.
These two paychecks are RSUs, reported as regular wages on my W‑2. Apparently either the W‑4 doesn't cover them or there is a (large) minimum percent withheld.
I am concerned that if I set my W‑4 to withhold no taxes I will owe a penalty for not paying any taxes in the first and third quarters.
What is the minimum tax I need to pay in the first and third quarters to avoid this penalty? And if the sum of the taxes in the first and second quarters covers the third, do I still need to pay a minimum amount?
I assume the IRS has an exorbitant interest rate, so investing the amount does not bring me out ahead.
Update #2 (to state the question more explicitly)
Can I withhold $0 on my regular paychecks without being penalized by the IRS? What if I don't have a job anymore in the second half of the year? (I don't anticipate losing my job, but want to be prepared for it nonetheless.)
The question is not about how to reduce (or increase) the withholding on the RSUs, I've called the broker, they won't or can't do it. Some of the answers and comments talk to this. While useful information, it is not the question.
Update #1 I already have my W‑4 with 25 allowances and withhold an "additional" amount for each paycheck. The 25 allowances ensures only the flat amount comes out of each paycheck, with the exception of the RSUs.
I think my RSUs are not counted as supplemental income because I do not see it as such on a W-2. They are included in my regular wages on my W‑2. On the other hand, they do take a 25% cut from the RSUs and withhold it for taxes. This seems normal for RSUs from my searching around the internet; so I consider them as regular wages and not supplemental income. I'll be reading Pub 525 very carefully now. (Update: Pub 525 doesn't say they are supplemental income. So my question still stands.)