Allowances Question

Thanks in advance for any replies.

I have a question about my w-4 allowances and paycheck deductions. Last year had ten allowances and even though I had a lot taken out for my year-end bonus, my itemized deductions (mortgage interest, charitable, etc) allowed me to get a 2500 dollar refund. This year my pay will be approximately the same (same monthly, same bonus). I decided to increase my allowances to 16 to get more money now instead of from a refund. The increase in allowances decreased my federal withdrawl about 40%. Since I didn't do this until August, I still expect about 1500 in a refund. My question is: Is there any issue to raising my allowances to 20, which brings my federal withdrawal for my regular paychecks the rest of this year to close to 0? Will the IRS care? Will it flag anything if nothing is being taken out for federal? (Technically I haven't received my bonus yet, but there's a

99.9% chance that I will in December) Hopefully I explained this well enough to understand..

Thanks again.

Reply to
Indiana_John
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If you can document, if asked, that 20 is now the correct number of W-4 exemptions needed to bring your wihholding in line with your tax liability, then you may submit such a W-4.

The employer is no longer required to immediately notify the IRS of this W-4, though the IRS will find out shortly.

If the IRS believes it is too much, they could ask you for some proof, of they can first tell the employer to change the exemptions to Single Zero, and then ask for you to prove it :-(

So there is a certain risk, which should eventually work itself out.

Reply to
Arthur Kamlet

So, 10 and over isn't reportable anymore?

Reply to
D. Stussy

So, 10 and over isn't reportable anymore?

Reply to
D. Stussy

That's correct.

Reply to
Arthur Kamlet

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