With all my deductions I typically end up getting just about all of my federal taxes back at the end of the year, minus about $500. Can I claim exempt on my W2 and just have them hold out enough to cover that $500? I'd rather be putting the money in my savings than have them hold on to it.

Yes you can. Just fill out a W4 form with the new figures.

Hmm. Just read the W4. Says in order to claim exempt that you had a right to a refund of ALL income tax. Well they gave it all back except about $500 so I guess I can't do that. Could I claim something like 10 allowances to basically do the same thing?

Yes, just up your exemptions.

Maybe something to check, but based on how much you W2, adding additional exemptions may throw up a red flag to the IRS. <BR> <BR>But my philosiphy is if you not getting audited by the IRS every 5-10 years your not pushing the envelope enough.

Nice philosophy! If they come after me, they must be really bored! Only reason they would is because they wanted to keep that $4800 till the end of the year. No reason I shouldn't be able to dump it in my account. <IMG SRC="http://www.wakeworld.com/MB/Discus/clipart/happy.gif" ALT=":-)" BORDER=0>

I think that your employer is required to notify the IRS if you claim over 10 exemptions or claim exempt. Read the form i think there is perjury involved if you file a false form. As stated above to go exempt you have to have a right to a refund of all taxes.

Is there any other way to limit what they are taking out of my check? Seems like I should be able to keep that money if they are just going to give it back at the end of the year.

You can claim as many exemptions as you have based on the Deductions and Adjustments Worksheet on page 2 of the w4 form

this is part of my job. If you don't meet the requirements to claim exempt, but you want to reduce your FIT, then i would suggest that you familiarize yourself with the IRS tax tables and calculate an amount that you want withheld. As far as the 10+ allowances or exempt status, we no longer notify the IRS, we just keep them on file in case of an audit. Beware though if an issue does arise with what your claiming, the IRS will most likely notify your employer and fix your claiming status to single with zero exemptions. (seems to happen a lot anymore)

So can I tell them what specific amount I want withheld, without setting the exemptions? If this is possible, it would work out best.