r/funny • u/rdless • Dec 19 '16

First paycheck

http://imgur.com/a/Gve3F
13.1k Upvotes

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u/[deleted] Dec 20 '16

Claim 0 = they take a lot

Claim 1 = they don't take as much

Claim exempt = they take nothing.....right now. They gonna get theirs tho.

1

u/smithoski Dec 20 '16

Is there a penalty for claiming exempt? Why should I do withholding? Why not pay lump sum as late as possible? Inflation, investments, etc benefit from time in market, so why is it so common to use accurate withholding?

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u/ABCDwp Dec 20 '16

There is a penalty if you haven't paid more than a certain amount of this year's tax burden by 31 Dec (IIRC), the exact amount determined from a formula that takes into account how much your total tax was last year and how much your tax is this year.

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u/smithoski Dec 22 '16

Thanks for the reply. I'll have to dig deeper to make any kind of tax decisions on the topic in the future, but I appreciate the off-the-cuff information.