Lol, no it's not illegal. You're allowed to adjust your withholding to whatever you want. It's a tradeoff between risking having to pay in at the end of the year or getting money back at the end of the year.

The strategy is perfectly lawful. Honestly if you could pay exactly what you owe and get a $0 refund then that is ideal, but near impossible to pull off perfectly. I am trying to convey that it is better to owe a little than it is to get a refund because you could be using that money throughout the year. According to the IRS:

>To avoid a penalty, pay your correct estimated taxes on time... You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:
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>Your filed tax return shows you owe less than $1,000 or
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>You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.