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> The amount of taxes being collected throughout the year are by design higher This is not true at all. You decide how much money will be deducted from each pa
by woobar 12y ago
> The amount of taxes being collected throughout the year are by design higher
This is not true at all. You decide how much money will be deducted from each paycheck by filling out form W-4 and similar state forms. You can make withholding adjustments after each paycheck.
IRS will penalize you if you "prepay" too little (for instance, if you owe them more than 10% of your total tax), but there nothing that prevents you from not giving them interest-free loan.
- plongeur 12y agoJust that the process you described is risky ("penalize") and seemingly more complicated than filing a tax return.
- woobar 12y agoThis process does not replace tax return, so I am not sure why would you compare it to filing a tax return. It's a required step to establish your paycheck withholdings. You will do it anyway. There is always a risk of penalty if you make a mistake while filling out this form or have unexpected income during the year.
- goodcanadian 12y agoI have found that when I fill the forms out honestly and accurately, it results in too much tax being withheld. It is certainly true that I can fudge the forms to get a more accurate withholding (and I have done that at times), but it does seem to withhold too much by default.