Hypothetically Speaking! Is it legal and a good idea?

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.....

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.

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.

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

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).