How many exemptions should I put with paycheck?

[Erik Pacpaco]

Hello,

my mom once told me to increase the number of exemptions with my job so that I will pay less in taxes and get the most return with each paycheck. The reason behind that is because you're technically giving the government a tax free loan for 1 year from April to April and that it's better to get more from each paycheck and just pay at the end of the year.

We have some real estate for which we try to increase our deductions but I work a lot of overtime as an ER nurse so that I can save in order to invest in real estate and make ends meet in our high cost of living in Hawaii.

Is my mom correct with her advice?

I would like to get the most with each paycheck to achieve my goals in real estate and at the same time decrease the amount that I pay at the end of the year to the IRS. Any advice? 

[Basit Siddiqi]

@Erik Pacpaco

The IRS/States want their share of taxes as you earn it.

Withholding from your paycheck is one way to do it.

The ideal scenario is that you pay $0 with the return that you file in April of the following year.

If you have to make a payment with the return you risk having to pay the estimated tax penalty.