What happens if I file tax exempt to stop having taxes taken out of my pay. But contribute to my 401k, will that help my tax bill be less at the end of the year?

4 Comments

1. AnonymousNovember 13,2025 at 2:58PM UTC

   Ask a financial planner. They can explain the penalties and possible legal claims

2. AnonymousNovember 13,2025 at 3:16PM UTC

   For a traditional 401k, those deductions are taken out pre-tax anyway.

3. Kerry RoperNovember 13,2025 at 6:27PM UTC

   "To claim exemption from federal income tax withholding on your Form W-4, you must meet both of the following conditions for the relevant tax years:

   For the prior tax year (e.g., 2024), you had a right to a refund of all federal income tax withheld because you had no tax liability.

   For the current tax year (e.g., 2025), you expect a refund of all federal income tax withheld because you expect to have no tax liability.

   If you qualify, you can write "Exempt" in the appropriate section of Form W-4, Employee's Withholding Certificate and submit it to your employer. This status only applies to federal income tax, not Social Security or Medicare taxes. You must submit a new Form W-4 by February 15 each year to continue your exemption for the next calendar year. "

   If you contribute to the 401k approx the same amount that you will owe in fed taxes, you should complete the deductions worksheet on page 3 of the form W-4. If its greater than the typical deduction for your tax category, you can fill that in on the first page, and it will likely lower your withholding enough. The goal of taxes withheld is to break even, you want neither a huge refund or a large tax bill.

4. AnonymousNovember 21,2025 at 3:37PM UTC

   That depends on a litany of factors, including your personal finances, your income & expenses,, your filing status, dependents (if any), etc. You may not want to reveal that info on a public forum.

   Have you tried speaking to a tax-professional such as a CPA about this? They’d be able to help you.