 Just how far can you adjust your W-4?
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 Dear
Tax Talk,
I want to file as exempt on my W-4 and put the same amount in savings to pay the taxes at tax time. Can I do this?
-- Dennis
Dear
Tax Talk,
On the W-4, what is the maximum number of dependents that can be claimed for withholding? I'm single with no dependents, yet can I still claim say eight allowances so that my check is larger each month? And then towards tax season, can I request to have portions of my pay deducted automatically by my employer? Does this sound feasible, and is it legal?
-- Supoj
Dear Dennis and Supoj,
An employer withholds income taxes from your wages based on the Form W-4 that you submit. Form W-4 establishes the number of exemptions you are entitled to claim, which results in more or less income tax being withheld.
You cannot file a Form W-4 that claims exemption from withholding unless you incurred no tax liability in the preceding year and expect none this year.
Similarly, you are not entitled to claim more exemptions than you can reasonably expect to claim on your tax return.
Your employer is required to send certain W-4 forms to the Internal Revenue Service. Such examined forms include any that claims more than 10 withholding allowances or exemption from withholding when an employee's wages exceed $200 a week. Your boss is probably not going to like sending your Form W-4 to the IRS, and the IRS is going to ask you to justify what you did.
And if you file a false Form W-4, you may be subject to a $500 penalty.
In summary, what you both are contemplating can't be done legally.
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