Asked about 1 year ago - East Brunswick, NJ
FlagI am considering getting a new job. The total annual income I will get will be what I am getting now, but made up of base salary plus end of year bonus. I don’t want to make less monthly (net, after taxes etc) than I am doing right now, so can I do the following: on the W4, claim a very large number of allowances for my monthly salary such that almost zero tax is withheld, and then when I get the bonus, have as much of it withheld as is necessary to make up for the tax I need to make up?
Very, very bad idea. You can claim more allowances on the W-4 than you would get just by following the worksheet, but if you end up backloading your taxes the way you're trying to do, you will probably end up owing penalties for not paying your estimated taxes properly, and if you happen to forget to adjust your withholding for the final year-end bonus payment, or if you decide not to because, well, other uses for the money have sprung up in the meantime, you will be asking for a world of hurt, tax-wise.
Please don't do it.
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