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What I find truly amazing about the tax situation here in the US is the sheer unpredictability. You the employee are burdened with choosing the right formula to

What I find truly amazing about the tax situation here in the US is the sheer unpredictability. You the employee are burdened with choosing the right formula to deduct taxes from your paychecks, but there is no ironclad way to ensure that you deduct only the exact right amount—or to check whether you've been deducting enough. For most people, tax time comes and either they get a bunch of money back (they deducted too much), or they owe a bunch of money (they deducted too little). I'd rather just have exactly the right amount deducted. Some people choose to not deduct any, and put a guesstimate of what their tax bill will be into savings, so that they can make some tiny amount of interest on it over the course of the year, then when tax time comes, pay just exactly what's owed. But this feels like playing with fire to me.

ghaff 10y ago
If all you have is a W-2 and minimal deductions, in my experience it's pretty close unless you think +- $1K is "a bunch." Once you have dividends, stock sales, mortgages, other revenue, etc. your employer really has no way to know what the right amount to deduct is. If you're consistently over or under, you can change the number of allowances on a W-4 form. >Some people choose to not deduct any You can take a large number of allowances but I'm not sure you typically can just not take any deductions. If you significantly underpay you may get hit with a penalty and will have to make estimated tax payments the following year.
delecti 10y ago
> Some people choose to not deduct any [...] this feels like playing with fire to me Well it should, because it's not really legal. If you aren't having taxes automatically deducted then you're expected to pay quarterly estimated taxes. And if you should have been having taxes automatically deducted and underpay by too much, then there's a fine associated with it.
- monster_group 10y ago
  >And if you should have been having taxes automatically deducted and underpay by too much, then there's a fine associated with it. And interest!

ghaff 10y ago

If all you have is a W-2 and minimal deductions, in my experience it's pretty close unless you think +- $1K is "a bunch." Once you have dividends, stock sales, mortgages, other revenue, etc. your employer really has no way to know what the right amount to deduct is. If you're consistently over or under, you can change the number of allowances on a W-4 form. >Some people choose to not deduct any You can take a large number of allowances but I'm not sure you typically can just not take any deductions. If you significantly underpay you may get hit with a penalty and will have to make estimated tax payments the following year.

delecti 10y ago

> Some people choose to not deduct any [...] this feels like playing with fire to me Well it should, because it's not really legal. If you aren't having taxes automatically deducted then you're expected to pay quarterly estimated taxes. And if you should have been having taxes automatically deducted and underpay by too much, then there's a fine associated with it.

monster_group 10y ago
>And if you should have been having taxes automatically deducted and underpay by too much, then there's a fine associated with it. And interest!