Question by : What about using the tax exempt income for capitol in my small business; i.e. new equipment?
I am considering taking on a two month project and filing exempt. With the non taxed money, buying equipment for my small business. Paying taxes on the money that is not spent for business.
Answer by SmartA$ $
You are not allowed to claim “exempt” on a W-4 form unless you had no tax liability last year and expect to have no tax liability this year. It says so right on the W-4 form. If you want to virtually eliminate federal withholding, its perfectly legal to claim a bunch of allowances as long as you don’t end up owing more than $ 1,000 when you file.
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