need quick tax withholding help

[1 FMF]

I have 1 job salary, and wife is hospital worker and get's W-2's from 5 different hospitals. One of them is her full time job more or less, where she put's in 30 hours a week. This paycheck is fairly stable and even over the year. The other 4 hospitals are perdiem jobs where she picks up hours at her leisure, so there's no way I can really estimate how many hours or paychecks she'll get there over the year. She will make as little as $500/year at one job and maybe as much as $10k - $15k at another, and these are on top of her regular 30 hr a week job which is mid $30k/yr. So for example, say she makes a total of $50k a year gross, if you total all the box 1's on the 5 w-2's.
She claimed 0 exemptions on all her w-4's for 2006, because she owed a substantial amount in 2005 for having not enough withheld. But as I do my taxes for 2006, I see she still did not have enough withheld. Can someone explain to me what the math is behind the federal withholding amount in box 2 of the w-2? And why the total federal withholding amount is falling way short, even though she's claiming 0 exemptions on everything?
fyi- i claim myself as an exemption, have 2 mortgages and property taxes where the total deductions are between $15-25k. Last year we filed MFS, but this year it looks like it may be better filing jointly but only by a few bucks and to save her from oweing a small penalty.

last question, in general let's say for a single salaried job of $50k a year, with 24 even pacychecks over the year, how do I find out the withholding difference between claiming 1 exemption versus 0 exemptions on the w-4?

 

[javacontour]

This should be something you can find on google, or irs.gov

I figure this and when I was married, I had enough withheld from my check to cover my spouses portion of the taxes as well. My pay and paycheck was pretty steady and she made about 20% at most of our income. So I just figured mine as if I made 120% of what I made, and estimated the tax liability using the previous years tables and had enough withheld for all of us.

I don't know how you split your money in the house, but this may be the easiest way to do this.

First estimate what your tax liability is, and then see to it that you have about that much withheld.

I could usually get to within $500 of my final tax bill this way.

Finding the tables will help a great deal.

 

[CivicFan]

I don't know for payroll but for banks, if they withhold any interest earned, the amount is 28% for federal, and 10% state withholding. There are no exemptions or anything in this case so I don't think my answer is much help

.

 

[CivicFan]

Why don't you ask your HR person?

 

[drm7]

This can happen when you have 2 wage earners. Each earn in the lower or middle bracket. At the end of the year you add them up and you are put in the next higher tax bracket. The W2 has instructions for dual-income families to use to estimate how much to withhold. In the past I had 0 deductions and had an extra $100 per check (24 chks/year) withheld to make sure I didn't owe a boatload at the end of the year. It may be harder for you because it sounds like your wife's income is pretty variable.

 

[javacontour]

You can look here or google Federal Withholding Tables

http://www.yourmoneypage.com/withhold/fedwh1.shtml

and

http://www.irs.gov/pub/irs-pdf/p15.pdf

 

[obbop]

The problem likely exists within the bookkeeping folks at those part-time jobs.

They are assuredly using computerized systems.

Too often, those systems are set-up in a manner that trets the part-timers differently than someone working full-time.

Whatch it!!!! Dern' pesky tachyon beams. Wreaks havoc with the holodecks.

Anyway, I ran into this problem with the substitute teaching stuff. To fix it, I had the bean counter-types add 25 bux to each pay period for federal withholding. If I worked more I would have increased that amount.

Talk to the ones that actually KNOW how their software handles inputs. Hopefully you will not have to talk to more than 20 or so bureaucrats and wannabe' bureaucrats who have no idea how their system actually works but due to their belief in their own self-importance and belief in their criticality to the system you will need to educate the dingalings as to how little they know THEN obtain the name of the next idiot then work from cubicle to cubicle then office to office until you interact with one of the few than actually knows the system and can make the very minor adjustments needed to bring ordr out of chaos.

Sadly, despite protestations to the contrary from our addled feminine lovelies, the majority of nonessential cubicle dwellers will likely be females so, remember, do not expect to be able to use logic with them. Appeal to their emotions.

Good luck.

 

[Carbonics]

heres a tax question in regards to witholding.

if you are self employed you make quarterly payments to the IRS, if you are not then your employer witholds for you - is there a way you can do your own witholding and keep the 15% or whatever bracket you fall into and put it in a seperate acct and pay whatever you owe at the end of the year? I don't trust the IRS, they have messed up mine a few times by not counting payments made etc, it's just a hassle to have to prove to them they cashed one of my checks.

 

[K-Man]

Carbonics, don't try to do that. First a disclaimer: I'm not an expert on tax laws, nor am I trying to give legal advice. Now that that's done, I'll say that I do try to follow tax laws and trends, and also am familiar with what a lot of the tax protestors argued and got nailed for.

What you propose is to have no withholding and then simply pay the IRS the full amount on 15 April. The problem is that adjusting your withholding to have nothing withheld at all will raise huge red flags at the IRS, as some of the nuttier tax protesters advocated doing this very thing. In fact, I believe your idea is actually technically illegal now because of these nuts, but someone more versed in tax law specifics will have to confirm this.

The protesters were essentially claiming things such as that income from your labor is not technically subject to federal taxation, and one way to get around this was to claim extra exemptions to eliminate all withholding. Their arguments are usually based on arcane rulings and laws and typically involved taking statements out of context and twisting meanings. (Example: their claim that paying taxes is "voluntary", meaning you don't "have" to do it, based on the old statement in the tax form instructions that the US income tax system is based on "voluntary compliance". Ha ha.) Needless to say, all of it is false.

Of course, the people who spread this scheme in seminars and on the internet weren't offering to pay the back taxes, penalties, and interest when the IRS computers caught up with the incredulous types who fell for their arguments. And the IRS did.

In addition, employers not making scheduled employee withholding payments will in itself raise flags. Part of this is not only the tax protestor issue, but also an ongoing problem with employers with cash flow problems using the withheld money to pay bills—or themselves—instead of the IRS. Quite a few small businesses have gotten in big tax trouble this way.

Also, under IRS rules underwithholding by $500 or more—meaning that you have to cut a check for that amount when it's time to file the Form 1040 on 15 April—can result in penalties under certain conditions, especially if this isn't the first time for you. Again, don't change your withholding.

Maybe all of this is too much detail, but I believed you would need the background. Better the hassle you have than the far, far bigger hassle you'll have if you try not to have anything withheld from your checks.

 

[dwendt44]

Does she claim single 0 or married 0??
With small paychecks from parttime and temp jobs, they often don't take enough out. $500 a year; I'd be surprised if they took anything out at all.(that job).
You could claim 0 too, to cover her tax short fall.
If she's already at single 0, she could have a small additional amout deducted each pay period.
I know one guy that 'claimed' his status was at -1; don't know if you can go lower than single 0, but ask anyway.
My 2¢

 

[Pete C.]

Both My wife and I claim SINGLE with NO dependents. Haven't had to pay in 30 years. Also got refunds every year. We file joint returns and share major deductions (mortgage interest, church , salvation army etc) but also list individual deductions (work stuff, education, medical).

Some would say we're crazy to let Uncle Sugar use our money interest free, but I don't have to write a check at tax time, and she can't spend what she ain't got.

 

[Carbonics]

yes, no witholding.

what is wrong with that? it's not tax evasion or failing to pay taxes, or trying to get out of paying taxes...

you just save it and wait to see what the IRS says you owe based on what you made, then pay them - the ONLY reason I ask is because they are terrible at calculating what you have paid and bad at keeping records.

I just fail to see the point in handing them money every 2 weeks, hoping they count it all, and letting them earn interest off your money when you could be doing that.

I find it funny that if you are late on a tax payment they charge you interest, but you can't do the same.

and kids have to pay income tax, but can't vote - no go finish making my nike's.

 

[rshaw125]

If you owe more than $1000 you have an automatic penalty for too small a withholding.Calculated as a %. Try quarterly payments. A lot of people make them.

 

[JHZR2]

At work we get our taxes withheld automatically. I typically got a ncie check cut, even with the standard deduction.

A co-worker and I both bought homes within the last year. He had already claimed a large number of deductions, despite being single and not making that much money, but I only claimed what I thought to be reasonable for my single self: one.

IIRC, he has 6 exemptions right now. Even with his itemized deduction for taxes, he still paid more than necessary, and is getting back about $250.

I was suprised at that... If that is the case (he makes about the same money as I), then Im getting a real fat check, as my house was more expensive, and I only claim one deduction...

FWIW. Not much for your question, I suppose, but it sure seems that its better to pay a bit too much, even if youre giving up 4.5% interest or paying a few bucks less on a balance on the credit card - than paying uncle sam a fee for not giving him enough of a free loan...

JMH

 

[dwendt44]

My refund was held up last year, I got interest added on when it did finally come.

 

[Gary Allan]

Quote:

---

My refund was held up last year, I got interest added on when it did finally come.

---

You will be taxed on the interest

 

[Carbonics]

I just think it's stupid, but then again if I was the IRS I would do the same thing - how many people can truly be trusted to save a percentage of their income in a seperate account for this very purpose ? they would all spend it, just look at CC debt and home equity loans.... you would have 90% of people not being able to pay their taxes and the whole system would go down.

a whole bunch of bad apples spoils it for the few.

 

[eljefino]

She should leave her main job alone but then sign up for an extra ~$20/period from her other part time jobs. Those are what are doing her in as they're taxed like she makes $5000 a year when she in fact gets 10x that.

Here's the fun question, if she worked zero hours, would they want the $20? Or would no check get issued? Maybe the next check would have several months' worth of back deductions sucked away?