Would you be happy to get $5,000 less of a tax refund than last year?
One of my clients had over $5,000 in income tax withheld from her paychecks, while she was actually exempt from withholding. The result was that it all got refunded.
There is no reason to give the US Treasury a loan like this (although they could use it with the massive national debt 😁) .
We adjusted her withholding (actually claiming exempt status) on her W-4, and next year she will be getting at least $5,000 less for her refund.
The good part is that she will be taking home an extra $417 per month, and won't have to wait for a tax refund to get access to these funds.
Are you sure your withholding was calculated right on your W-4? If you will get a big refund of withheld tax, or will owe a lot of income tax, you may need to adjust it.
Note that this is relevant only for regular US employees who receive a W-2.
It's not relevant for self-employed people, even those receiving a 1099-NEC as an independent contractor. Nor is it relevant if you receive wages from a foreign company.
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