In about 15 years in the labor force, I've never once had the withholding match up perfectly with the taxes owed. Either not enough is withheld or too much.
Either way, I'm stuck filing the #($&ing paperwork.
Submit a signed W-4 [0] to your employer with the word "Exempt" on Line 7.
Of course, by doing so you also certify that you are actually meet the legal requirements stated on the form for $0 withholding, under penalty of perjury, so you obviously should only do it if, you know, you actually qualify for it. But that's how you do it.
Just look at a W-4.
It's all there. (Including the no-income-tax-deduction option.) Just fill it out and hand it to your employer.
http://www.irs.gov/pub/irs-pdf/fw4.pdf
> I'm aware of that but my point is that most employers would not allow that since the employer is also liable if it under-withheld for a W2 employee.
AFAIK, they aren't liable for under withholding if they withhold correctly according to the W-4 signed by the employee, even if the W-4 claims things (e.g., "exempt" when the employee does not meet the qualifications) that are not accurate.
The employer is only liable for the Medicare/SS withholdings. Half of them are deducted from your check and the employer pays the other half out of pocket. As long as you're being paid as an employee you have no control over that. The employer will only withhold and send income taxes based on what you've specified on your W-4.
Since withholding is performed upfront it either uses older declarations or (more likely) some sort of standard chart. So it's similar to a utility bill: some amount is withheld throughout the year and once all data is in the actual amount of taxes due is tallied and the payment is adjusted (with a check to or from the IRS).
Either way, I'm stuck filing the #($&ing paperwork.