AboutMike Wellman Expertise I was a former Manager with Price Waterhouse, now PricewaterhouseCoopers, the largest accounting firm in the world. I have had clients in almost every industry and of every size.
I will only answer questions dealing with IRS problems such as delinquent tax returns, Offers in Compromise (Tax Settlement), IRS collection matters including installment agreements, liens, levies, seizures, audits, appeals, innocent spouse claims and injured spouse claims. All other will be referred to the question pool.
Experience Over 25 years experience in taxation specializing in IRS collections, examinations and appeals.
Publications New York Times, Wall Street Journal, Your Money.
Education/Credentials BBA, Baylor University.
Awards and Honors IRSOS.com won the Knowledgeweb award for educational excellence for content.
Expert: Mike Wellman Date: 1/24/2008 Subject: Withholding Payroll Taxes for Investment
Question Is it legal to max out your dependency status to nine dependents on your W-4 when you are single with no dependents? I would like to pay my federal taxes at the end of the year and pocket what I would normally pay into a 5% interest savings account so I can earn interest on what I would otherwise pay into payroll taxes. Is this legal? Will I get a penalty from the IRS when I fill my taxes?
Answer It is not legal and, if you owe more than $1,000 when you file your return, you will pay a 10% penalty. So assume you would owe $5,000 - you would pay a penalty of $400. Assuming you earn the money evenly through the year, the most interest you could earn would be 2 1/2 % of $5,000 - or $125.
