What's Your Philosophy on Your Personal Tax Withholding?

[Stratego]

With regards to claiming tax exemptions on your paycheck. You can claim your actual number of exemptions that you'll file with thereby making your tax withholding as accurate as possible. However, you're not required to do so for your paycheck tax withholding so people approach the topic with varying philosophy.

Some people claim 0 exemptions even though they can claim more. They'll see a lower net amount each paycheck, but will have to pay less at the end of the year (or may get some back). Those who do this claim that it helps them manage their money better by letting them get used to a lifestyle with a lower income. And when the tax return comes, they can save the money or treat it as a nice bonus.

Others claim up to 99 exemptions. They get more per paycheck, but will ultimately have to pay the money back in owed taxes. They do this because at the end you'll end up paying the same amount anyways. If they pay more than they need to up front it's like giving the government an interest free loan.

What's your philosophy on this?

[Aaron]

Money misers will tell you, get the money that you earn, when you earn it, and put an estimated tax amount in savings for the end of the year.

In other news, not all of us are cardboard cutouts of interesting people...so we actually try to incorporate money into our lives in a way that ads some interest emotionally, even if it doesn't make perfect numbers sense, and some people like to get refunds at the end of the year.

I've done both, I don't see an advantage one way or the other... but I am absolutely irritated by people who think they're cool when they chide people for allowing the gov. to take money out of their paycheck...

You're not cool, you're probably boring as f**k.. and you should keep your tax advice to yourself.

[Darkhorse]

Antisemite.

[Winchester]

I have money taken out of my paycheck and I pay quarterly estimates, between the two I pay in 100% of my previous years tax so as to not have to pay underpayment penalties. Nothing worse than having to pay the government tax and interest. If I really wanted to play the game I wouldn't have any withholding nor pay estimates throughout the year and do myself a "bonus" at year end and have it all go pay an amount equal to 100% of my previous years taxes then I could hang on to my money a bit longer and avoid penalties... but it ain't worth the effort for so little gain.

[Winchester]

[Winchester]

[Winchester]

[Winchester]