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Accounting/Taxes Question

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se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 23, 2012 12:47 PM
This is probably a long shot, but thought I would ask anyway. Say you are expecting a lump sum payment from your employer that will be taxed as a typical paycheck. Is there away a way to figure out how many dependents to claim so that they take only what you want them to take in taxes?

For instance, if the payment was 35k and you wanted them to take 10k in taxes, is there a way to figure how many dependents to claim for that pay period?
Feb 23, 2012 12:47pm
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 23, 2012 1:04 PM
FatHobbit;1093684 wrote:I have no idea, but this might be a place to start

http://www.hrblock.com/free-tax-tips-calculators/index.html

I've figured out what the Feds will be wanting come April of next year, I just need to figure out if there's a way to know how many dependents to claim to only have a certain amount of taxes witheld.
Feb 23, 2012 1:04pm
J

jmog

Senior Member

6,567 posts
Feb 23, 2012 1:14 PM
se-alum;1093697 wrote:I've figured out what the Feds will be wanting come April of next year, I just need to figure out if there's a way to know how many dependents to claim to only have a certain amount of taxes witheld.
Easiest way I haev done this with bonus payments is to just adjust my dependants claim for the whole year.

What I mean is, if your salary is $80k, and you are getting a bonus of $35k. Fill out your dependants as if you make $115k spread throughout the year.

Your bonus check will still get taxed harder, but every regular check throughout the year will get taxed lighter to make up for this.
Feb 23, 2012 1:14pm
MorgansRaiders's avatar

MorgansRaiders

Member

32 posts
Feb 23, 2012 1:19 PM
Where I work we have commission checks that we can request our taxes to be at a 25% or 30% rate. I don't know if the payroll dept at your employer will honor that?:cry:
Feb 23, 2012 1:19pm
GoChiefs's avatar

GoChiefs

Resident Maniac

16,754 posts
Feb 23, 2012 1:23 PM
Just file exempt and give them bitches nothing until the end of the year.
Feb 23, 2012 1:23pm
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 23, 2012 1:27 PM
MorgansRaiders;1093713 wrote:Where I work we have commission checks that we can request our taxes to be at a 25% or 30% rate. I don't know if the payroll dept at your employer will honor that?:cry:
My payroll dept. is the Federal Gov't...lol. I don't think I can do percentages, I can just adjust my dependents.
GoChiefs;1093720 wrote:Just file exempt and give them bitches nothing until the end of the year.
Then I have to make sure I don't spend it all before then!
Feb 23, 2012 1:27pm
Q

QuakerOats

Senior Member

8,740 posts
Feb 23, 2012 1:57 PM
It sounds as if the payment is most likely to be construed as 'supplemental wages', which are generally taxed at a flat 25% for federal income taxes. There are several variables that can come in to play, but typically the employer is required to withhold at the supplement wage rate of 25%. You would then 'square up' when you filed your 1040 tax form and quite possibly get a refund if this caused you to be overwithheld for the entire year. See IRS Publication 15 (Circular E) Section 7 - Supplemental Wages.
Feb 23, 2012 1:57pm
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 23, 2012 2:11 PM
QuakerOats;1093763 wrote:It sounds as if the payment is most likely to be construed as 'supplemental wages', which are generally taxed at a flat 25% for federal income taxes. There are several variables that can come in to play, but typically the employer is required to withhold at the supplement wage rate of 25%. You would then 'square up' when you filed your 1040 tax form and quite possibly get a refund if this caused you to be overwithheld for the entire year. See IRS Publication 15 (Circular E) Section 7 - Supplemental Wages.
Since you seem to know what you are talking about, this is the situation. My employer owes me right around $34k in backpay for a raise I was supposed to have over the last 3 years, and never received. So they'll just cut me a check for that money. So I'm afraid it's going to look like I made 34k in that 2 week time period, and it will put my yearly earnings up over 80k. So I figured they're likely to tax that lump sum at around 35%. I'm looking at owing the gov't around 12K come tax time next year. I want them to take 7-8K out of that 34k, and my taxes on my regular paycheck will be around 5-6k for the year, putting myself pretty safely above what I will have to pay, so I may even get a little refund. If they were to tax it at 25% as supplemental wages, I would be fine with that, but I don't know that they will.
Feb 23, 2012 2:11pm
Q

QuakerOats

Senior Member

8,740 posts
Feb 23, 2012 3:54 PM
Back pay awards are considered 'supplemental wages', and in your case should be taxed at a flat 25% (although there are some nuances that can vary that). If you wanted, you could then tweak your dependents or withhold a flat amount on the rest of your wages throughout the remainder of the year to try and make things work out by year-end.

See page 15 - Section 7 - Supplemental Wages http://www.irs.gov/pub/irs-pdf/p15.pdf
Feb 23, 2012 3:54pm
dwccrew's avatar

dwccrew

Not Banned

7,817 posts
Feb 24, 2012 6:17 AM
se-alum;1093723 wrote:My payroll dept. is the Federal Gov't...lol. I don't think I can do percentages, I can just adjust my dependents.



Then I have to make sure I don't spend it all before then!
Even a government worker is trying to fuck over the government. Reps
Feb 24, 2012 6:17am
W

WebFire

Go Bucks!

14,779 posts
Feb 24, 2012 7:16 AM
You don't have to do it via independents. Just tell them you want 10k taken out. If they don't know how to that, they need different jobs.
Feb 24, 2012 7:16am
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 24, 2012 8:11 AM
dwccrew;1094427 wrote:Even a government worker is trying to fuck over the government. Reps
LOL...not really trying to screw them over, just want the money now instead of at refund time next year.
Feb 24, 2012 8:11am
Q

QuakerOats

Senior Member

8,740 posts
Feb 24, 2012 10:44 AM
WebFire;1094437 wrote:You don't have to do it via independents. Just tell them you want 10k taken out. If they don't know how to that, they need different jobs.
Technically, it is not up to "them" to do it however you or they wish; they are required to follow IRS withholding guidelines (see above).

Now, in reality, will this one-time situation ever get examined and cause the payer to get into hot water for not following proper withholding requirements - probably not.
Feb 24, 2012 10:44am
W

WebFire

Go Bucks!

14,779 posts
Feb 24, 2012 1:31 PM
QuakerOats;1094586 wrote:Technically, it is not up to "them" to do it however you or they wish; they are required to follow IRS withholding guidelines (see above).

Now, in reality, will this one-time situation ever get examined and cause the payer to get into hot water for not following proper withholding requirements - probably not.
Maybe the lump sum is different? But on a w-4 you can name an amount to be withheld. It doesn't have to be by independents.
Feb 24, 2012 1:31pm
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 29, 2012 9:57 AM
QuakerOats;1093901 wrote:Back pay awards are considered 'supplemental wages', and in your case should be taxed at a flat 25% (although there are some nuances that can vary that). If you wanted, you could then tweak your dependents or withhold a flat amount on the rest of your wages throughout the remainder of the year to try and make things work out by year-end.

See page 15 - Section 7 - Supplemental Wages http://www.irs.gov/pub/irs-pdf/p15.pdf
Maybe I read it wrong, but it looked to me like they could either tax it as supplemental wage or tax it as they would a paycheck for a 2-week time period by not specifying the difference between the supplemental wages and regular wages.
Feb 29, 2012 9:57am
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 29, 2012 11:03 AM
I don't get the whole "raise i was supposed to have over the last 3 years but never recieved" thing. You either are afforded a raise or not, right?
Feb 29, 2012 11:03am
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 29, 2012 2:32 PM
ZWICK 4 PREZ;1100246 wrote:I don't get the whole "raise i was supposed to have over the last 3 years but never recieved" thing. You either are afforded a raise or not, right?
After a year on the job, I was supposed to receive a "grade" increase, which is an increase of about $10,000/yr. When I went to my supervisor, at the time, to ask about it, he said I only get a step increase because I was hired on a student authority, and wouldn't get my grade until I completed school. Well this train of thought was passed through 2 other supervisors I have had since then. My newest supervisor and the HR rep, who are both new to their positions, questioned this. Come to find out, I should've gotten a grade increase after year one. I'm now going on 3 1/2 years of not having that increase, so they owe me $34k+ in backpay for the grade increase that is automatic as long as our yearly evaluation meets the criteria, which it does. So, I get the backpay, and will now be paid at the grade level I should've been for the previous 3 1/2 years. Basically, it was a screw up in our HR dept.
Feb 29, 2012 2:32pm
ZWICK 4 PREZ's avatar

ZWICK 4 PREZ

Senior Member

7,733 posts
Feb 29, 2012 2:51 PM
se-alum;1100618 wrote:After a year on the job, I was supposed to receive a "grade" increase, which is an increase of about $10,000/yr. When I went to my supervisor, at the time, to ask about it, he said I only get a step increase because I was hired on a student authority, and wouldn't get my grade until I completed school. Well this train of thought was passed through 2 other supervisors I have had since then. My newest supervisor and the HR rep, who are both new to their positions, questioned this. Come to find out, I should've gotten a grade increase after year one. I'm now going on 3 1/2 years of not having that increase, so they owe me $34k+ in backpay for the grade increase that is automatic as long as our yearly evaluation meets the criteria, which it does. So, I get the backpay, and will now be paid at the grade level I should've been for the previous 3 1/2 years. Basically, it was a screw up in our HR dept.

Jeez
Feb 29, 2012 2:51pm
se-alum's avatar

se-alum

The Biggest Boss

13,948 posts
Feb 29, 2012 3:21 PM
ZWICK 4 PREZ;1100682 wrote:Jeez
Yea, I was pissed at first, because I've been paying for school out of my own pocket, and that has made money tight on occasions, but getting that big check will be nice, and give me the opportunity to do some things I should've had the money to do over the last few years.
Feb 29, 2012 3:21pm