<prompt> Human: Next week I am staring a job where my base pay salary will be 70k. Its expected I will promote after the first year, after which there are three annual pay increases, so in 4 years my base pay is expected to be around 130k. Additionally, there is a plethora of overtime to be had. Ive always had jobs where my base pay was between 40-60k a year. Now I dont know what Im facing by being placed in a new tax bracket. In the past, Ive always claimed 0 initially, and have had additional money taken out, usually 100 each for state and fed per pay check. At first it worked out great, because I made so little that I always got money back at tax time. The last 3 years however, I end up getting completely raped at tax time, despite the fact that I was only seeing MAYBE 60 of each paycheck. Some people have said I should have more withheld from each check to soften this blow at tax time. Some others have said I should claim 10 right away and have none withheld - this way I can stash it in my savings and make interest until tax time. With interest rates what they are right now, is it worth hanging onto my money and then sending the tax board at tax time? What are the pros and cons of this?Im in CA. Im sure this question has been asked before, but I searched and couldnt find anything right away.  <response>: You may not understand how tax brackets work. Here is a good explanation.Some others have said I should claim 10 right away and have none withheld - this way I can stash it in my savings and make interest until tax time.You may owe penalties for underwithholding if you do that. 