Can you request no taxes be taken out of your paycheck?

Answer 1

You can request that no federal income tax be taken out of your paycheck. You cannot request that no Social Security tax be taken. State tax rules vary by state.

But be aware that there are consequences. If you underpay your federal income tax by a large amount (at least $1000 or more in some cases), there will be a penalty which is calculated like interest on the unpaid balance. If you are discovered to have claimed exemption from withholding or to have claimed too many withholding allowances without having a reasonable basis at the time you did so, you could be subject to a $500 civil penalty in addition to the underpayment penalty and the IRS could order your employer to withhold at the highest rate. There is also a criminal penalty on the books, but it is rarely enforced and only under extreme circumstances.

If you owed no federal income tax the previous year (meaning that if anything was withheld you got it ALL back) and expect to owe none this year, then you are completely within your rights to check the "exempt" box on your W-4 form and have no income tax withheld. You will not get into any trouble.

I do not mean to discourage anyone who legitimately will owe no tax from having no tax withheld. That is a perfectly legitimate thing to do. But if you are thinking that you can just have no tax withheld and then pay the government a large sum of money at the end of the year, you will get in trouble for doing that. Aim to have approximately the right amount withheld. It doesn't have to be exact, but don't go overboard in either direction.