Hello,
I paid $1,831 in federal taxes in 2018 because I graduated and only worked half the year. This year, I expect to pay much higher taxes due to working the entire year. I'm under the impression that I only need to have $1,831 in taxes withheld from my job to satisfy the 100% of previous years taxes requirement to avoid paying penalties/interest for under withholding taxes regardless of this year's income. If I stop having my employer withold taxes, can I simply deposit the money I'm not withholding in a high interest savings account and then pay all my taxes at tax time in 2020 (for 2019 tax year)? I've already had $8,900 withheld for the year to date. Please confirm this would void both penalties and interest. There is an exception on the irs website that says the previous year's taxes must cover a 12 month period (https://www.irs.gov/publications/p505#en_US_2019_publink[phone number removed]). Aren't all tax returns for a 12 month tax year? Or since I only worked half the year would I not be eligible for a penalty exclusion for having 100% of my previous year's taxes withheld?
