Originally Posted by
GetawaysRus
OK... But what if an employed person raises the number of exemptions they are claiming. This reduces the amount of income tax withheld (both Federal and State) on each paycheck and there would be additional tax owed. Could the employee then add extra payments quarterly to make up the difference?
I agree. One can easily claim one or two extra exemption. Someone was telling me that the IRS wants you to have paid -- 80% or 85% -- of the taxes during the year. If it is less, then the penalty is large. Also, the other option as someone mentioned was the 1040. So, increase the exemption and if you think you will fall short -- below 85% -- then make an extra payment before Jan 15th and the remainder when you actually file your returns.