What if i file exempt on my W-4?

Question

What if i file exempt on my W-4?

Answer 1

If it's justified, by IRS regulations only, you'll be okay.  HOWEVER, before your employer can implement an "exempt" W-4 withholding, the employer must have the IRS review it and the justification.  The IRS CAN and does reject exempt requests and require that the employer withhold from your paycheck at the "Single-Zero" or "Single-One" rate for at least one or two years.  

If you are claiming exempt just to get out of paying withholding, the IRS will reject it, and MAY impose penalties on you.  If you had enough deductions last year to justify claiming exempt, they will probably approve it.

Answer 2

If justified, nothing.  If not justified, you could be hit with penalties.