I'm a grad student and at the beginning of each semester the university adds the cost of my insurance into my monthly income. The problem is that this causes too much money to be withheld, resulting in me not having enough money to cover my bills that month. Is it okay to claim 0 and then just have a set amount withheld every month instead? I only make about 15-18k a year, depending on how much I can earn over the summer. This is my first year as a grad student so I am unsure whether I will receive similar tax breaks as I did as an undergrad. Thank you for any help.

  • Claim 0 what? Exemptions? In this case, it seems like you want to claim more not less....
    – user32479
    Dec 21, 2015 at 15:37
  • Agreed, you want to claim more. It's annoying that the IRS doesn't give us a better way to tune our withholding, but until they do we have to work with the knobs they've given us. Just remember that if gou under-withhold, and then are delayed in paying your actual tax bill, they'll hit you for a fine.
    – keshlam
    Dec 21, 2015 at 15:50
  • Part of the reason the IRS does not allow you to withhold zero tax is to prevent you skipping town at the end of the tax year. Dec 22, 2015 at 17:56

2 Answers 2


Claiming 0 exemptions leaves the largest amount of tax withheld from your paycheck, which isn't really what you're looking for.

You certainly can claim a larger number of exemptions, and then put an amount in box 6 to specify additional withholding. That is not recommended though; the best way to do this is simply to put in the number of exemptions that gets you to about the right amount of tax withholding. Use the IRS Withholding Calculator to determine this amount. (Unfortunately, it looks like it works for 2015 only right now - so you may need to wait until Jan 2016 to run it). You could also use a paycheck calculator, like Intuit's, which will give you an idea of what any particular exemption count will give you in withholding.

If you expect 0 tax due next year (2016), and paid 0 tax this year (i.e., 100% of your withholding was returned to you), then you can write EXEMPT in box 7 and have no withholding. Only do that if you actually will pay zero tax, though. Also, be careful about state withholding; some states (like IL, for example) might tax you in situations where the Federal Government might not.


If you get an account at Treasury Direct you can loan money to the Federal government and they will pay interest. For example : if you buy a 4 week T-bill they may take $99.98 out of your account and in 4 weeks give back $100.

So if you have $0 withheld you can still set $ aside to pay taxes when they are due but in the meantime the government will pay you a bit of interest.

$0.02 / 99.98 = 0.02% ROI but 0.02% is better than 0% and you would avoid being fined.

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