Reacting to Bad Tax Advice Part 2

19 Mar 2026 · 0 min

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In this segment of the YouTube video "Reacting to Bad Tax Advice Part 2," Speaker A confronts Speaker B’s claim that individuals can avoid federal taxes by writing “exempt” on a new W‑4, receiving a larger paycheck, and parking the withheld amount in a high‑yield savings account. Speaker A breaks down the math, explaining that the IRS imposes underpayment penalties that accrue at roughly 7% interest compounded daily, which exceeds the typical 4‑5% yield of high‑yield savings accounts. Consequently, the strategy results in a net loss rather than an arbitrage opportunity. The dialogue concludes with a warning to avoid tax advice from unqualified influencers and to trust credentialed tax professionals who share liability for the advice they give.

You're not arbitraging the system. You're just losing money every day.
I'm not paying federal taxes, and there's a lot of people just like me. And every single day I get the same question: How do I do it? You're going to need to fill out a new W-4. You're going to write exempt, sign, and date here, and you'll turn that into payroll or HR. Then I would take the money you save in taxes and put it into a high-yield savings account.
Okay, let's do the math. IRS penalties currently accrue at about a 7% interest rate compounding daily. But even a great high-yield savings account only pays between 4% and 5%. So you're not arbitraging the system, you're just losing money every day. Stop taking tax advice from influencers who have never signed a tax return. Instead, trust the professionals who actually share the liability with you. And follow for more real tax saving strategies.