W-4 Allowances

[Kram BergGold]

My client gets paid infrequently. Sometimes the amounts are large like 25k and sometimes small.
After losing 2/3 of her gross to taxes in April she changed her allowances to 99. I have been told that IRS looks into people who seemingly are claiming a large number of allowances. Can anyone give me more info on this?

[Burke]

Pub 505 says you cannot claim more withholding exemptions than those to which you are entitled. She can claim exempt if she has no tax liability. Or she can calculate what should be deducted to cover her liability and claim that number. 99 is excessive. See page 11 of that Pub for Rules Your Employer Must Follow. They may be required to send a copy of the W-4 to the IRS.

[Kram BergGold]

the 99

The 99 actually makes her withholding come out to the correct amount. My question is, if the employer sends the 1099 to the IRS what if anything does the IRS do with that info?

[S T]

Kram

Maybe this link will assist you http://www.irs.gov/Individuals/Withh...ions-&-Answers

Employers in the past were not necessarily in compliance with submitting W-4 for excess exemptions/allowances, it appears at some point IRS changed the submission of a W-4 form for excess exemptions/allowance and now is only requiring if IRS sends a notice to the Employer to "lock" withholding (lock-in letter)

Sandy

[Roberts]

The 99 actually makes her withholding come out to the correct amount.

As long as she doesn't owe a substantial amount with her return and she pays what is due on time, doubt anyone is going to throw a fit.

[FEDUKE404]

Some serious deductions here

The 99 actually makes her withholding come out to the correct amount. My question is, if the employer sends the 1099 to the IRS what if anything does the IRS do with that info?

I would love to see the Deductions and Adjustments Worksheet for THAT Form W-4!!

Claiming 99 "extra" would mean somewhere in the region of $386k itemized deductions? Wow!

FE