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SPetty
01-09-2005, 11:19 AM
How is withholding calculated? How can I make sure I withhold enough, but not too much?

Several years ago, I was within $200 for a couple of years in a row. If I have to write a check to the IRS for less than $200, that's the perfect deduction amount. I did that a couple of years, then the next year I got a small refund.

Then a couple of years ago, I was suddenly forced to write a much bigger check, so I changed my W4 and asked that extra money be taken out every month for withholding.

I just did my rough taxes, and I'll be writing a check to the IRS for over $2000 this year.

WTF? What's going on? How can I determine how to fill out my W4 so that a more accurate amount is taken out every paycheck?

Anybody here have any insight?

jjinfla
01-09-2005, 01:28 PM
Check with your personnel department at work.

Jake

dg-in-centralpa
01-09-2005, 02:01 PM
Do you have an accountant? Are deducting everything you can? Do you pay quarterly taxes? I was once told that I should take 30% of my income(I'm self employed) and put it away for taxes.

DG - just ideas

ras314
01-09-2005, 03:02 PM
<blockquote><font class="small">Quote SPetty:</font><hr> I just did my rough taxes, and I'll be writing a check to the IRS for over $2000 this year.

Anybody here have any insight?
<hr /></blockquote>
Its because you made too much money last year. HaHaHaHa.

Seriously though, if you owe too much you may be forced to pay quarterly. /ccboard/images/graemlins/frown.gif

Popcorn
01-09-2005, 03:18 PM
Use an accountant who knows what he or she is doing. It's not worth your time doing it yourself in my opinion.

Rod
01-09-2005, 10:51 PM
You know this may sound to simple. They with held X amount of taxes, you owe X amount of dollars.

What you owe + what you paid in = yearly tax, divide that by 52, that tells you appx what to have them take out each week. State taxes with held is usually a percentage of federal taxes. If your making too much money send me some! LOL

Rod

Sid_Vicious
01-10-2005, 04:48 AM
The only way I can see you jumping to a 2K check is if you got bonuses, and in that case you have no way of calculating the year ahead of time, all you can do is squirrel away part of the incentive pay immediately and save it for tax time. Maybe I am off base but I can imagine that your particular employer does give some healthy bonuses to the harder workers, at least they used to...sid

SPetty
01-10-2005, 11:25 AM
Just thought I'd ask.

No, no bonus. Even if there were, they withhold tax from bonuses.
No, not self employed.
No accountant. My taxes are extraordinarily simple. Earn money, pay taxes.
No, I can't say "take X dollars per check". I can ask them to withhold an additional $200 a month, but thought I'd see if there was someone here that had any insight into how they use the W4 information to determine how much is withheld so that I could use that info to determine how much additional I wanted to ask them to withhold. I don't want a huge refund!

P.S. Sid, I don't work where you think I work, remember?

Rich R.
01-10-2005, 11:57 AM
SPetty, to avoid problems with the IRS, I have always found it best to just send them my whole check and let them send back, what is left, when they are done. /ccboard/images/graemlins/confused.gif
I don't get much back. /ccboard/images/graemlins/tongue.gif

Wally_in_Cincy
01-10-2005, 12:35 PM
<blockquote><font class="small">Quote SPetty:</font><hr> ... I don't want a huge refund... <hr /></blockquote>

Call me stupid but I avoid this problem by having an extra $20 per week taken out. I know people say you are giving an interest-free loan to the government but with interest rates where they are now I figure I'm only losing $10/year.

I don't like writing a check in April because I believe the IRS frowns on cold checks.

I can't help you with the W-4 thing but you could email socrates. He's a CPA. He knows a lot about this stuff.

Rod
01-10-2005, 02:20 PM
[ QUOTE ]
No, I can't say "take X dollars per check". I can ask them to withhold an additional $200 a month, but thought I'd see if there was someone here that had any insight into how they use the W4 information to determine how much is withheld <hr /></blockquote>

Ok, X amount per week = X amount per month,(use that number) I was just giving you a way to figure it out, how they want to slice it or dice it is there business. It could be a yearly amount and let them do the math again. Can or will someone divide by 12. LOL Use 100, 200 or whatever amount needed. If you claim 0 on the W4 they take more out, if you claim 1 they take less etc.

I had a chart from the feds and state that showed the amount to be taken out. In this case and others that requested a different amount the chart wouldn't work. I have had requests for more or less to be taken out which was not a problem. I guess it depends on your company if they will do the same.

Rod