What is the name of your state?
Iowa
Our company just informed us today, that they are now going to use a "flat tax" calculation method for figuring Federal and State (IA) withholdings on our bonus and profit sharing checks. They state in their letter to us, that this is mandated by the IRS? I currently claim 4 which means less money taken out for me, but this flat rate is 25%, meaning that I lose 1/4 pay right off the top. How can they just out of the blue, take out more than I stipulated on my W4? I would of course get back any overpayment at tax time, but it puts a heck of a hit on my monthly income. Getting it back at tax time doesn't buy groceries or help pay bills for 11 months of the year? Am I over-reacting? Is this legal and is there a way around it? I also liked getting the letter today 1/14/05, and the "greeting" at the top of the page states "effective January 1st, 2005. Talk about dropping a bombshell on everyone! Any advice or info would certainly be appreciated!!
Thanks so much!!
Douglas
Iowa
Our company just informed us today, that they are now going to use a "flat tax" calculation method for figuring Federal and State (IA) withholdings on our bonus and profit sharing checks. They state in their letter to us, that this is mandated by the IRS? I currently claim 4 which means less money taken out for me, but this flat rate is 25%, meaning that I lose 1/4 pay right off the top. How can they just out of the blue, take out more than I stipulated on my W4? I would of course get back any overpayment at tax time, but it puts a heck of a hit on my monthly income. Getting it back at tax time doesn't buy groceries or help pay bills for 11 months of the year? Am I over-reacting? Is this legal and is there a way around it? I also liked getting the letter today 1/14/05, and the "greeting" at the top of the page states "effective January 1st, 2005. Talk about dropping a bombshell on everyone! Any advice or info would certainly be appreciated!!
Thanks so much!!
Douglas