Weird paycheck issue...

[Edaarin]

Something is odd with my paycheck. Looks something like this

Gross pay ... 100%

Taxes
Fed Withholding ... 0%
Fed MED/EE ... 1.44%
Fed OASDI/EE ... 6.14%
VA Withholding ... 4.23%

Total taxes ... 11.81%

Net Pay ... 88.19%

Am I going to get reamed on April 15th? Or is this somehow my fault and I'm going to get slammed for tax evasion?

[The Korean]

the hell? Definitely contact whoever handles the paychecks. I've never even heard of someone avoiding fed withholding.

[Back]

Never had that happen. I’d be a little concerned too... next year.

Now, the big question. Can anyone back out Edaarin’s check amount? :lol:

[peam]

Contact payroll. I had the same thing happen to me last year. Since I caught it early, there wasn't a negative impact on my tax return this year.

[Edaarin]

What was the issue, do you remember?

[hectomaner]

gross income last year : 100%

minus

taxes paid last year : 0%

equals

net take home income last year : 100%

:)

[peam]

Originally posted by Edaarin
What was the issue, do you remember?

I never found out. It was fixed by the next paycheck though.

[Jazuela]

I've been fighting with the store owner about my taxes ever since I was hired. I'm supposed to be married, 1 exemption for federal, and exempt from state because we get it all back at the end of the year (big mortgage = big tax break)

On my paycheck, it reads married, 1 exemption - amount withheld - ZERO. State - zero (though they used to take state out, I had to re-file my w-2 or 4 or whatever it is).

So I get only FICA and medicare taken out, even though I want federal taken out.

You won't get in trouble for tax evasion. Taking tax out of your paycheck is voluntary, not required by law. You can pay whatever you owe at the end of the year with no penalties at all.

One of these days the boss will actually tell ADAP (the company that cuts the paychecks) to fix it, and make sure it's really fixed. Til then, I'm keeping track of what I owe. Between my husband and myself, we'll probably -still- get money back at the end of the year and not owe anything at all. At worst, it'll be a couple hundred bucks, which our state refund will cover no problem.

[longshot]

Originally posted by Edaarin


Am I going to get reamed on April 15th? Or is this somehow my fault and I'm going to get slammed for tax evasion?

Fix this now, or start stocking up on chapstick.

You're really going to want a good amount of lube for that one...

[Tsa`ah]

No idea, but I'll echo the sentiment ... get it fixed.

I'll go one further ... claim zero ... always.

[Jorddyn]

Originally posted by Jazuela
You won't get in trouble for tax evasion. Taking tax out of your paycheck is voluntary, not required by law. You can pay whatever you owe at the end of the year with no penalties at all.


False.

It's based on how much you made/paid in taxes last year, how much you owe this year, among a couple other factors, I believe.

General rule - Most taxpayers will have paid enough tax to avoid this penalty if they have paid at least 90% of the tax shown on the return for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. However, if your adjusted gross income was greater than $150,000 in 2003, or $75,000 if you are married filing a separate return, the test is 90% of the tax shown on your 2004 tax return, or 110% of your 2003 tax, whichever is smaller.

Details here (http://www.irs.gov/taxtopics/tc306.html)


I'm willing to bet that because you didn't have any earnings YTD with your current employer, it is calculating based on the assumption that you won't hit the "llimit" where you'd have to pay taxes. Once you hit the "limit" (standard deduction + personal exemption), taxes should kick in. If this is the case, it is a dumb way to do it. Additionally, your OASDI and Medicare are a bit low - it is calculating like you have some pre-tax deduction that works out to approximately 1% of your income. It might be rounding, but SS isn't supposed to round. If you don't have any deductions, talk to your payroll people to figure out what in the hell is going on.

Jorddyn, CPA :D

Edited to add - The IRS doesn't care if your employer screwed up your withholding. It is your responsibility to make sure it is correct. Any penalties/interest are yours and yours alone.

[Edited on 6-29-2005 by Jorddyn]

[peam]

PWN3D!!!!!!11111oneoneonelevendividedbyelevenisone oneone111!

[Kyra]

Hmmm, being single & head of household with 2 dependents I claim 9 on my federal & haven't paid any into federal taxes in about 10 years. Still get back between 3 to 4k for my return also.

My ex tried that for about 3 months without any dependents to claim & wound up getting rammed up the ass without lube with the amount he had to pay in:D

K.

[Jazuela]

So Jorddyn, according to that thing you quoted, it -is- true that there are no penalties for having 0 federal taxes withdrawn from your paycheck, -if- you fall under those adjusted gross income lines (75k for joint filing).

You -would- have penalties if your AGI was 75k or over, but not under.

Makes sense, thanks for the explanation. In all my previous jobs while I was married, I always claimed exempt on state, married filing jointly with 1 exemption on federal, and we have always gotten money back on both at the end of the year.

[Skeeter]

Originally posted by Kyra
Hmmm, being single & head of household with 2 dependents I claim 9 on my federal & haven't paid any into federal taxes in about 10 years. Still get back between 3 to 4k for my return also.

My ex tried that for about 3 months without any dependents to claim & wound up getting rammed up the ass without lube with the amount he had to pay in:D

K.

I'm guessing you make under 20k a year and qualify for the EIRC. Although claiming 9 dependents could potentially get you into trouble.

[theotherjohn]

Originally posted by Jazuela
So Jorddyn, according to that thing you quoted, it -is- true that there are no penalties for having 0 federal taxes withdrawn from your paycheck

You can claim anything during the year. The only time it matters is when you file.

You should do your paycheck so that you get the maximum amount of take home pay during the year because you deserve to make interest money not the government

[Jorddyn]

Originally posted by Jazuela
So Jorddyn, according to that thing you quoted, it -is- true that there are no penalties for having 0 federal taxes withdrawn from your paycheck, -if- you fall under those adjusted gross income lines (75k for joint filing).

You -would- have penalties if your AGI was 75k or over, but not under.


I'm sorry, but that's incorrect.

From my original post -

General rule - Most taxpayers will have paid enough tax to avoid this penalty if they have paid at least 90% of the tax shown on the return for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

This is generally the rule if you are single and making under 150k. You have to have paid 90% of your liability, or 100% of the previous year's liability, regardless of income.


However, if your adjusted gross income was greater than $150,000 in 2003, or $75,000 if you are married filing a separate return, the test is 90% of the tax shown on your 2004 tax return, or 110% of your 2003 tax, whichever is smaller.

This is the gernal rule if you make over 150k.

Jorddyn, clarifyingly :)

[DeV]

Originally posted by Tsa`ah
I'll go one further ... claim zero ... always. Any particular reason why?

[Tsa`ah]

Yep, there is a reason.

The very first year I filed for taxes was a year that I claimed myself for the tax year. It was also the only time I have ever owed.

So, personal experience and distrust of the ever changing tax laws. Though I am married with children and make much more than I did then ... the horror of owing is still fresh in my mind.

[Latrinsorm]

I don't follow, Tsa`ah. It's not like I'm Jorddyn, but the tax work I've done pretty clearly states that more exemptions = less taxes.

[Edaarin]

Got it worked out hopefully.

I got some bad advice from a senior associate on how to fill out my W-4 worksheet.

Ironically, she works in the tax office in DC.

[AnticorRifling]

Originally posted by Latrinsorm
I don't follow, Tsa`ah. It's not like I'm Jorddyn, but the tax work I've done pretty clearly states that more exemptions = less taxes.

The more dependents you claim the less tax that is taken per pay check. However the amount taken per paycheck might not = what you actually owe and you will end up getting the big green weenie come tax time. By claiming 0 you pay more taxes out of each pay check and stand to have a better chance at a return.

[Tsa`ah]

Originally posted by Latrinsorm
I don't follow, Tsa`ah. It's not like I'm Jorddyn, but the tax work I've done pretty clearly states that more exemptions = less taxes.

Your tax liability is based on your income for the year. Tax liability does not change according to your paycheck deductions.

Claiming nothing for deductions means I have paid in more than what I am liable for. Meaning that when the wife and I file, we claim 4. Our payroll deductions will always be 0, our filing claim will always be us and our children. The amount paid in taxes becomes greater than our liability.

In short, what Anticor said.

[Edaarin]

Got it fixed.

I'm now getting $260 less every paycheck :(

Although I think I fit one of Virginia's withholding exemptions, so I might get some of that back...

...still, I'm only forking over about 27% of my gross. Not as bad as I was expecting.