Why would someone choose to have extra money withheld from his paycheck for federal taxes?
A person lives in a state with high income taxes, and wants to make sure enough taxes are withheld.
This person considers himself a patriot and wants to pay more taxes.
This person chose an insurance plan with a high deductible.
This person did not want to risk having two little money withheld and facing a penalty when filing their tax return.
1. The person lives in a state with high income taxes, and they want to ensure that enough taxes are withheld from their paycheck to cover their state tax liability. By choosing to have extra money withheld for federal taxes, they can reduce the risk of owing a large amount in state taxes at the end of the year.
2. Some individuals may consider themselves patriots and want to contribute more towards funding public services and government programs. By opting to have extra money withheld from their paycheck for federal taxes, they can voluntarily pay more than what is required, indirectly contributing to the nation's financial well-being.
3. This person may have chosen an insurance plan with a high deductible, meaning they will have to cover a significant portion of their medical expenses before their insurance coverage kicks in. By having extra money withheld for federal taxes, they can ensure they have additional funds available to cover potential medical costs during the year.
4. There may be a concern about not having enough money withheld and facing a penalty when filing their tax return. If the person underpays their taxes throughout the year and owes a substantial amount when they file their return, they may be subject to penalties and interest charges. By choosing to have extra money withheld, they eliminate this risk and meet their tax obligations in a timely and accurate manner.