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Re: OT Federal Income Tax Withholding Question


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Posted by rpirkle1 on February 03, 2010 at 05:32:38 from (76.97.180.115):

In Reply to: OT Federal Income Tax Withholding Question posted by super99 on February 02, 2010 at 16:33:44:

Hmmm.. Having just finished my taxes and working on the daughters.. here's my take...

On $11K, married, they're not going to take much because your tax on that at year end shouldn't be much. IF it were the only reported income between the two of you, the IRS would send you money (Earned Income Credit if you have kids, Making work pay credit, possibly more ....it's unreal).

Withholding is based on what the total tax for the year should be. Since everyone gets certain exemptions/deductions before calculating taxable income, withholding doesn't kick in until after the averaged amount of those are accounted (ie you don't have taxable income until it gets above a number (around $13,500 for married couples) between standard deductions and exemptions). So they don't normally withhold until you get above that $. ... and it's averaged by pay period

Looking at the IRS guide for employers at http://www.irs.gov/pub/irs-pdf/p15a.pdf shows that with holding starts at $264/wk or $1146/mo and $11K really doesn't hit those.

So if you're wanting them to take taxes out to help offset other income (farm, self-employment, etc.) she's going to need to adjust her W-4 to take more out (and I think she'll have to do it on the fixed amount section because at normal rates they're not going to hit the table for taking any out).

One other option is to check the box for married but withhold at the higher single rate. That kicks in withholding at $116/wk or $504/month.

Sorry this is long... hope it helps.

Randy


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