Claiming Exempt with 6 figure salary - would it raise red flags in accounting at a large company? Is it legal?
My annual salary is in the low 6 figure range so normally you wouldn't expect someone to claim exempt. But I'm married, my spouse does not work, and we have 6 dependent children. As a result our tax liability is $0 after the child tax credits are applied. It was $0 in 2017, I expect it to be $0 for 2018 once I finalize my tax return, and fully expect it to remain at $0 for 2019.
So I think I qualify for exempt. I'd like to stop having money withheld which just ends up being an interest free loan to the IRS. But I don't want to raise any alarms at the accounting department and have someone lock me in at single - 1 or something.
So I'm looking for opinions. Do you think anyone would notice if I claimed exempt at a large company where everything is automated. If they did notice, would they change my withholding without telling me or just contact me to verify my situation?
I know nobody will know for sure, just looking for everyone's best guess at what might happen.
Also are there any IRS rules or income limits for claiming exempt? Like I said, my tax liability is actually $0 and I end up getting all my withholding back every year.