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Hypothetically Speaking! Is it legal and a good idea?

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posted on Aug, 9 2007 @ 04:13 PM
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I work and currently claim zero excemptions on my W4, so I get around $500 average takin out of my paycheck each month by the IRS.

Let's just say hypothetically that I can get a savings account with a 6% APY.

Would it be legal for me to change my excemptions to where the IRS doesn't take any taxes out of my paycheck so that I could pay the total of what I owe at the end of the year?

And...instead of the IRS takin the $500 in taxes out automatically each month, I take them out myself and place the money in the savings account and make 6% on it for the year, then when its time to do my taxes, I just pay what I owe, but atleast I made a little money in interest on it first.

I mean thats what the IRS and federal reserve is doing right? Using my money to make money in interest? I say if their gonna make money off me then I should be able to as well.

I mean $500 per month for a yr is $6000 and if that $6000 is in an account that gets 6% then thats $360 that I would have made just by withholding my own taxes.

Does this logic make sense to anyone? Is it legal? Will it work?

Ur opinions please.....




posted on Aug, 9 2007 @ 04:34 PM
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Originally posted by Termite197

Does this logic make sense to anyone? Is it legal? Will it work?


It sounds like a good idea on the surface. But, IMO if they ever let you do it they would probobly just charge you interest on the payments, much more than your 6 percent that you saved.



posted on Aug, 10 2007 @ 09:05 AM
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From what I understand, it doesnt matter whether I pay at the end of the year or have it deducted from my check. I will still be paying the same amount because its based on what you make not how you pay it.



posted on Aug, 10 2007 @ 09:40 PM
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Hey Termite,

If you are an employee your employer is legally bound to extract taxes.
If you start your own business then it is a whole different matter, you are "selling" your self as a product.

WIS



posted on Aug, 13 2007 @ 01:28 PM
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Of course it's legal for them to take however much they want from you...

It's not your money, they are lending you it (IMHO, unless I am right).



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