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income tax - recommended resources?

income tax - recommended resources?

Old May 9th 2008, 12:51 pm
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Default Re: income tax - recommended resources?

Originally Posted by rebs View Post
quick question, please...

who determines the withholding? is that something we decide and then tell HR? or will HR automatically determine how much based on what they know of our circumstances?

IF we did nothing, does that mean no tax would be withheld and we would be liable for any amount we owed IRS at the end of the tax year?
The withholding is based on what information you provide as regards deductions for married and children. The biggest mistake you can make is to over state your deductions to lower your withholding. If you do so, you could end up owing a huge amount of money at year end, and the IRS can be very unforgiving.
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Old May 9th 2008, 4:04 pm
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Default Re: income tax - recommended resources?

Originally Posted by dakota44 View Post
The withholding is based on what information you provide as regards deductions for married and children.
Who would we provide those details to? would that be employer's HR dept or IRS?

If we move over in July, my understanding is that we won't file a tax return until next April, by which time we could presumably owe loads if we've not been withholding along the way....

I guess what I'm trying to understand is how to get things set up initially...
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Old May 9th 2008, 4:10 pm
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Default Re: income tax - recommended resources?

Originally Posted by rebs View Post
Who would we provide those details to? would that be employer's HR dept or IRS?

If we move over in July, my understanding is that we won't file a tax return until next April, by which time we could presumably owe loads if we've not been withholding along the way....

I guess what I'm trying to understand is how to get things set up initially...
You fill out a form with the employer. It states whether you are married, if you will be claiming children as deductions etc. The form determines the rate of withholding, based on income for the pay period. The rate withholding can be greater if one pay period has a higher income. The system assumes that income is consistent for the year.

Yes...come April you could be in deep shit if you do not have enough tax withheld.
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Old May 9th 2008, 4:19 pm
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Default Re: income tax - recommended resources?

Aaaah, now I think I understand.....

So, if you're cautious about projected deductables at the point of giving that info to the employer, then the amount withheld is likely to be greater than the tax due come April when the actual deductables are known for sure...
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Old May 9th 2008, 4:24 pm
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Default Re: income tax - recommended resources?

Originally Posted by rebs View Post
Aaaah, now I think I understand.....

So, if you're cautious about projected deductables at the point of giving that info to the employer, then the amount withheld is likely to be greater than the tax due come April when the actual deductables are known for sure...
here is the file for the W-4 form they will have you complete to determine deductions. That should add to your confusion. lol
Attached Files
File Type: pdf
fw4.pdf (236.9 KB, 7 views)
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Old May 9th 2008, 4:27 pm
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Default Re: income tax - recommended resources?

Originally Posted by rebs View Post
Aaaah, now I think I understand.....

So, if you're cautious about projected deductables at the point of giving that info to the employer, then the amount withheld is likely to be greater than the tax due come April when the actual deductables are known for sure...
By jove I think you've got it.
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Old May 9th 2008, 5:40 pm
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Default Re: income tax - recommended resources?

Originally Posted by rebs View Post
Who would we provide those details to? would that be employer's HR dept or IRS?

If we move over in July, my understanding is that we won't file a tax return until next April, by which time we could presumably owe loads if we've not been withholding along the way....

I guess what I'm trying to understand is how to get things set up initially...
As said, you complete Form W-4 and give it to your HR/payroll department. You can change the amount of withholding any time in the year but completing a new form for them. Many of us have done the switcheroo when there is a bonus or other abnormal income event.

This link might help too; the IRS Withholding Calculator

You also asked "IF we did nothing, does that mean no tax would be withheld and we would be liable for any amount we owed IRS at the end of the tax year?"
If you under-withhold, there is a penalty.
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Old May 9th 2008, 5:56 pm
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Default Re: income tax - recommended resources?

Originally Posted by meauxna View Post
As said, you complete Form W-4 and give it to your HR/payroll department. You can change the amount of withholding any time in the year but completing a new form for them. Many of us have done the switcheroo when there is a bonus or other abnormal income event.

This link might help too; the IRS Withholding Calculator

You also asked "IF we did nothing, does that mean no tax would be withheld and we would be liable for any amount we owed IRS at the end of the tax year?"
If you under-withhold, there is a penalty.
Best advice of all...DO NOT **** WITH THE IRS. They'll get you in the end. And you will NOT enjoy it.
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Old May 9th 2008, 6:44 pm
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Default Re: income tax - recommended resources?

Originally Posted by dakota44 View Post
Best advice of all...DO NOT **** WITH THE IRS. They'll get you in the end. And you will NOT enjoy it.
While I agree with you 100% I'm trying to see if there was something in my post you object to & consider ****ing with the IRS or not.
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Old May 9th 2008, 7:07 pm
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Default Re: income tax - recommended resources?

Originally Posted by meauxna View Post
While I agree with you 100% I'm trying to see if there was something in my post you object to & consider ****ing with the IRS or not.
Noooooooo. Nothing in your post. I was just reinforcing the need to deduct appropriately, as you indicated, or face a penalty. Your post was perfectly fine.
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