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For working stiffs, like me, increase your withholding dependents by two or three and that’ll lessen the amount being sent to the coffers. You can't do anything about FICA or Medicare/Medicaid, but you can with your withholding.

Just take the maximum allowable deductions. Yes, it may mean you have to “pay” come tax time BUT if just 10% of the people who receive paychecks would do this it would put a severe crimp on the Washington “looter’s” cash flow! Just stash the extra cash somewhere and come tax time if you need it to pay Uncle Obama well then you have it.”

I’m going to add a very strong word or two of caution regarding the above advice.

First of all the number of allowances from withholding you claim on your W-4 do not necessarily have anything to do with the number of dependents you can claim on your 1040. What you claim on your W-4 are withholding “allowances” not “dependents”. In other words, a person who is single with no dependents could claim any number of withholding allowances above the one for themselves depending on their personal tax situation, i.e. they might have a good number of allowable deductions (losses on investments, the purchase of a home, moving expenses, medical expenses, etc.) so that when they file their taxes for that tax year they are still not under withheld. Conversely a married person with four dependents might claim Married but withhold at the higher Single rate and 0 allowances if they have other income not related to employment, capital gains on investments or a second job.

When you file your taxes if you owe more than $1,000, you may be charged a penalty for underwithholding plus interest from the time the IRS determines the tax should have been withheld and paid. However, if your withholding from the previous year was equal or above your tax liability for the previous year, you would not be penalized under the “Safe Harbor” rule.

But if you miscalculate and cannot pay the taxes owed when you file your return on or before April 15th, the IRS will charge you additional penalties plus interest for every month the tax balance remains unpaid. I know, been there done that, not pretty.

Also be advised that if you knowingly file a fraudulent W-4, i.e. claim an unreasonable number of allowances or claim “Exempt” when you are not entitled to, you could face a fine up to $1,000 and a year in jail.

I am a certified payroll professional. I sometimes see employees claim well over 10 allowances (I’ve seen 99 allowances) on their W-4 or claim “Exempt” from federal withholding. Under the current law, I do not have to report this to the IRS as used to be the case. Unless the form is known to me to be fraudulent; i.e. they modify the form to take out or add language, give me a form other than the IRS form W-4, fail to sign it or verbally tell me they are filing a fraudulent form so as to evade paying taxes, I am to accept it without question. I will however “gently caution” anyone claiming over 10 allowances or claiming “Exempt” to be sure that they understand the consequences of under withholding, but as we in payroll say, “We are not the W-4 police” and if someone underwithholds, that’s on them not the employer. I'm also not a tax advisor and cannot give personal tax advice other than to ask, "are you sure this is what you want to do? I've found that sometimes people misread the W-4 instructions regarding claiming “Exempt” to think that if they didn’t owe taxes the previous year, they can claim “Exempt” when what that actually means is that they didn’t have to “pay” any taxes in the previous year (100% of all taxes withheld were refunded) and don’t expect to have to “pay” taxes in the current year – very rare except in such cases of part time employees under 18 who are fulltime students and some retirees, very low income earners. When I explain that, many employees have told me, "no, that's not what I want" and give me a corrected W-4.

Also be aware that if the IRS determines you have filed a fraudulent W-4 or have in a previous year, claimed too more allowances that you were not entitled to, the IRS may send your employer a “lock in letter” in which the IRS will determine the number of withholding exemptions allowed that stay in force until the employer receives a notice from the IRS that the “lock in” is no longer in effect.

One more word of caution: if the so called “Bush tax cuts” are left to expire, if you had more than $2,500 in FSA withholdings in the previous year or any number of the coming Fiscal Cliff/“Taxmageddon” provisions, whatever you had withheld in the previous year, even if your income and number of dependent have not changed, it may not be enough in 2013.

The best advice; with all considered, is to have only enough withheld as to neither owe taxes nor get a refund when you file your return. You don’t want to get a big refund (that’s the government getting an interest free loan on your money) but you need to be careful to not be underwithheld and end up owing penalty and interest over and above the tax. That takes some work and planning and may mean you might need to change your withholding allowances for 2013 and or change them based on changes in income or anticipated deductions during the year.

If you use Turbo Tax or H&R Block software to file your taxes, they have some good W-4 calculators. There are also other free calculators available on the web like paycheckcity.com or your employer’s payroll processors like ADP.