Question: Is it possible to pay all my taxes at the end of the year instead of from each paycheck?

You can reduce your withholding by filing a new W-4 with your employer, but completely eliminating withholding isn't really what the system is designed for. The tax system is "pay-as-you-go," meaning you're supposed to pay taxes throughout the year as you earn income. If you don't have enough withheld, you could face an underpayment penalty when you file your return. The general rule is that you must pay at least 90% of your current year tax or 100% of your previous year's tax (110% if your income is over $150,000) through withholding or estimated quarterly payments. If you're determined to do this, you'd need to make quarterly estimated tax payments instead of having taxes withheld from your paycheck. The due dates are April 15, June 15, September 15, and January 15 of the following year.

This is exactly why I started using taxr.ai for my tax planning. I had the same idea about holding onto more of my money throughout the year, but was worried about penalties. I uploaded my pay stubs and last year's return to https://taxr.ai and it gave me a personalized withholding strategy. It showed exactly how much I could safely reduce my withholding without triggering penalties, and calculated how much I needed to set aside each month. The tool even created a custom W-4 form for me with the right entries to give my employer. The best part was it calculated the exact interest I could earn in my HYSA versus the potential penalties, showing me the optimal balance. Worked perfectly for me last year!

I tried taxr.ai after seeing it mentioned here and wow, I'm actually shocked at how helpful it was. I was definitely one of the skeptics - I thought it would just be another calculator that spits out generic advice. I uploaded my documents (took like 5 minutes) and it showed me I could safely reduce my withholding by about $175 per paycheck without triggering penalties. It even factored in my rental property income and stock dividends, which I didn't expect. The customized W-4 form it created worked perfectly with my company's HR system. My HYSA is paying 4.5% right now, so I'm on track to earn an extra $420 this year by optimizing my withholding. Definitely didn't think that would be possible without risking penalties!

If you're trying to contact the IRS to ask about this withholding strategy, good luck getting through to anyone. I spent DAYS trying to get clarification on something similar. Their hold times are insane. I finally used https://claimyr.com after being on hold for 3+ hours one day. Check out how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS for you and call you when an agent picks up. When I finally got through, the IRS agent confirmed that while you can adjust your withholding, you absolutely need to either have sufficient withholding or make those quarterly payments to avoid penalties. They also mentioned that if you do this for the wrong reasons (like trying to delay payment indefinitely), it could be considered tax avoidance.

Ok I need to publicly eat my words here. After expressing skepticism about Claimyr, I decided to try it because I was desperate to talk to someone at the IRS about my withholding situation. I signed up yesterday afternoon expecting it to be either a scam or disappointing. Within 2 hours, my phone rang and I was connected to an actual IRS agent! I didn't have to sit on hold at all. The connection was seamless - I was just suddenly talking to an IRS representative who was ready to help with my questions. The agent walked me through exactly what I needed to do with my W-4 and estimated payments to optimize my situation without penalties. Probably saved me hundreds in potential penalties and I got definitive answers straight from the IRS. Pretty amazing service honestly.

One thing nobody has mentioned yet is that you could increase your allowances on your W-4 to reduce withholding, but you need to have a legitimate reason for claiming more allowances. You can't just put a random high number to avoid withholding. If you get caught intentionally underwithholding, the IRS can instruct your employer to withhold at the highest rate AND you might face additional penalties. It's not worth the risk just to get a bit of interest in a savings account.

I'm actually surprised nobody mentioned that self-employed people do this all the time (except with quarterly payments). I left my W-2 job last year to freelance, and now I make estimated tax payments four times a year. I keep my tax money in an I-bond for the quarters between payments, which beats any HYSA right now. The key is being disciplined enough to actually set the money aside and not touch it. I've known people who spent their tax money and then couldn't pay when the bill came due.

I've been doing exactly what you're thinking about for the past two years, and it's definitely possible but requires careful planning. Here's what I learned: First, you can't completely eliminate withholding for Social Security and Medicare taxes - those are mandatory FICA taxes that must be withheld from your paycheck. But you can significantly reduce or eliminate federal and state income tax withholding. The key is making sure you stay within the safe harbor rules to avoid penalties. I calculate 110% of last year's total tax liability (since my income is over $150k) and divide that by 4 for my quarterly estimated payments. This guarantees no underpayment penalty even if I owe more at filing time. I keep all my tax money in a separate high-yield savings account that I never touch except for quarterly payments. Last year I earned about $380 in interest that I wouldn't have gotten with normal withholding. Not life-changing money, but it's something. The biggest challenge is the discipline aspect - you have to be religious about setting aside the money and making those quarterly payments on time. I use automatic transfers on payday so I never see the money as "mine." One tip: start conservatively your first year. Better to overwithhold slightly and get a refund than face penalties. You can always optimize more in subsequent years once you understand your tax situation better.

Just wanted to add a perspective from someone who works in payroll - we see employees try this fairly regularly, and there are a few practical considerations to keep in mind. When you submit a new W-4 to reduce withholding, your HR/payroll department might flag it for review, especially if it's a dramatic change. Some companies have policies requiring manager approval or additional documentation for significant withholding adjustments to protect themselves from liability. Also, be prepared for your final paycheck calculations to be more complex. If you're not having taxes withheld throughout the year, your year-end W-2 might look unusual, which could trigger questions if you ever need income verification for loans, etc. One thing that's worked well for some of our employees is a middle-ground approach: reduce withholding to the minimum safe amount (maybe 80-85% of expected liability) rather than going to zero. This gives you most of the benefit of earning interest on your money while keeping some automatic withholding as a safety net. The quarterly payment system works great if you're disciplined, but I've seen people get into trouble when life happens - unexpected expenses, forgetting payment due dates, or miscalculating their liability. Having some withholding gives you a buffer against these risks.