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You can set your withholding to nothing and end up with a fat bill every year. Financially, this makes sense. You could be making interest on the money you owe
by moftz 7y ago
You can set your withholding to nothing and end up with a fat bill every year. Financially, this makes sense. You could be making interest on the money you owe in taxes. However, not everyone is really able to be that disciplined or just financially need every dollar coming in. I think having both options, withholding and no withholding, is the best way.
- tedsanders 7y agoFYI, if you do this you will incur penalties. The United States requires payment quarterly. You cannot pay it all at the end of the year unless you want to pay penalties.
- nyczomg 7y agoThis is bad advice for many people. Depending on your income you might be subject to penalties if you don't withhold or pay estimated taxes: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...