You can underwithold income and payroll taxes through the year. There is no need to have periodic withholding it is just a convenience for budgeting.
The thing you cannot do if you don’t declare standard withholding is fall short or pay late (without a qualified extension). If you’re unable to pay the taxes you declined to pay through the year they will go after you. And if you’re late paying you will pay pretty significant interest on your owed amount.
protist@mander.xyz 11 hours ago
You misunderstand how tax withholding works. When you sign up for tax withholding, the IRS gets a portion of your wage each paycheck and sets it aside for you to cover your tax bill the following year. The IRS is only holding that money for you during that time before your annual bill is due, in what amounts to you loaning the government money interest-free. Many people do not withhold taxes and just pay it all at once. And yes, at this point, whether the IRS will exist as a functioning entity in 2026 is a legitimate question, so not giving them a free loan might be a good idea
Takumidesh@lemmy.world 9 hours ago
You don’t pay all at once, you need to pay quarterly tax estimates or you will be constantly paying penalties.
I really wish people would stop giving bad tax advice to strangers.
irs.gov/…/underpayment-of-estimated-tax-by-indivi…
blipcast@lemmy.world 1 hour ago
This! Thank you! Apologies for getting the reason for the penalty wrong, but I have personally had to pay this and I was starting to feel gaslit. Turns out, when you go on unemployment, you should still withhold for taxes even if you feel like you need that money more while unemployed.