Question about tax withholding on paycheck

[Jay968]

What is the name of your state?California
I'm not exactly sure where to go for help on this so excuse me if this is not the right place. But here goes...
I am basically retired and on social security. My wife is working and makes about $100,000/year.
I took on a small part time job, working between 10 and 15 hours a week at $14/hour.
The problem that I am having is that my employer is not taking any taxes out of my checks for either fed or state.
I filled out the W-4 form as follows: Checked Step 2 part C (you may check this box if there are 2 jobs...[wife and me]), Step 3 blank as I have no dependents, Step 4 I put $20 (additional withholding that I wanted taken out).

So on a $234 check (3 days worked) they took out the $20 that I had designated, $18 for a deferred retirement account (which I will never work there long enough to be vested in) and medicare tax (I am already on medicare).

Again, my wife earns about $100,000, and I make about $2500/month on SS and have 10% taken out of that for fed taxes.

WHY do they refuse to take out fed or state taxes on these paychecks? I fear I will owe hundreds plus penalties come next April if I let it go. If I manually designate a greater amount for them to take out, I fear this will mean they may take out too much if I should happen to work less than normal in a pay period for some reason.

When I ask them about it, they merely say they are not tax experts and cannot give me any advice.

Can someone please help?
Thanks

 

[Jay968]

What is the name of your state?California
I'm not exactly sure where to go for help on this so excuse me if this is not the right place. But here goes...
I am basically retired and on social security. My wife is working and makes about $100,000/year.
I took on a small part time job, working between 10 and 15 hours a week at $14/hour.
The problem that I am having is that my employer is not taking any taxes out of my checks for either fed or state.
I filled out the W-4 form as follows: Checked Step 2 part C (you may check this box if there are 2 jobs...[wife and me]), Step 3 blank as I have no dependents, Step 4 I put $20 (additional withholding that I wanted taken out).

So on a $234 check (3 days worked) they took out the $20 that I had designated, $18 for a deferred retirement account (which I will never work there long enough to be vested in) and medicare tax (I am already on medicare).

Again, my wife earns about $100,000, and I make about $2500/month on SS and have 10% taken out of that for fed taxes.

WHY do they refuse to take out fed or state taxes on these paychecks? I fear I will owe hundreds plus penalties come next April if I let it go. If I manually designate a greater amount for them to take out, I fear this will mean they may take out too much if I should happen to work less than normal in a pay period for some reason.

When I ask them about it, they merely say they are not tax experts and cannot give me any advice.

Can someone please help?
Thanks

After sending another email to payroll after receiving my latest check today to ask why there is still no withholding, I got a response saying "we are not tax experts, you may want to send an email with this question to the following link..." He sent me a link to a website for tax help from The United Way!
I responded by saying that I was not asking for tax advice, I just wanted to know "why there is no tax withholding in my paychecks. Isn't an employer obligated to do so?"

 

[LdiJ]

After sending another email to payroll after receiving my latest check today to ask why there is still no withholding, I got a response saying "we are not tax experts, you may want to send an email with this question to the following link..." He sent me a link to a website for tax help from The United Way!
I responded by saying that I was not asking for tax advice, I just wanted to know "why there is no tax withholding in my paychecks. Isn't an employer obligated to do so?"

Here is the thing...the new W4s are designed to cause someone to break even. In other words, to have very little refund or balance due.

That, unfortunately makes them much more complicated to fill out accurately. So, if you read the instructions carefully and the line items carefully you should provide your employer with enough information to withhold properly.

However, unfortunately some HR departments don't understand that it is their responsibility to determine how much basic withholding there should be...they expect the employee to determine it even though the form doesn't really allow for that. The form only really allows for the employee to determine how much EXTRA withholding there should be.

If the employee happens to know what their marginal tax bracket is, then the employee could instruct the employer to withhold a specific extra amount based on that. Unfortunately, most employees wouldn't have a clue about that, and employees who are dealing with a combination of part time employment, SS benefits and a spouse's employment would be in even worse shape.

A consult with a local tax pro could be of benefit.

 

[Jay968]

What is the name of your state?California
I'm not exactly sure where to go for help on this so excuse me if this is not the right place. But here goes...
I am basically retired and on social security. My wife is working and makes about $100,000/year.
I took on a small part time job, working between 10 and 15 hours a week at $14/hour.
The problem that I am having is that my employer is not taking any taxes out of my checks for either fed or state.
I filled out the W-4 form as follows: Checked Step 2 part C (you may check this box if there are 2 jobs...[wife and me]), Step 3 blank as I have no dependents, Step 4 I put $20 (additional withholding that I wanted taken out).

So on a $234 check (3 days worked) they took out the $20 that I had designated, $18 for a deferred retirement account (which I will never work there long enough to be vested in) and medicare tax (I am already on medicare).

Again, my wife earns about $100,000, and I make about $2500/month on SS and have 10% taken out of that for fed taxes.

WHY do they refuse to take out fed or state taxes on these paychecks? I fear I will owe hundreds plus penalties come next April if I let it go. If I manually designate a greater amount for them to take out, I fear this will mean they may take out too much if I should happen to work less than normal in a pay period for some reason.

When I ask them about it, they merely say they are not tax experts and cannot give me any advice.

Can someone please help?
Thanks

Thank you for this. It's actually restored some sanity to my brain! It used to be that filling out a W-4 form was one of the easiest tasks on earth. It's amazing to me that now one must consult a tax expert in order to do so.

My biggest concern is that if I designate an amount to be deducted from my check every two weeks, there may come some pay periods in which I might have worked less (taken a day or two off for some reason) and thus the amount that I had designated to be taken out of my checks may eat up anything that I'd end up with by working just a day or two in that pay period.

I have an appointment with HR Block on Tuesday to ask questions and figure out what the best way to go might be. Perhaps if I just keep the W-4 as it is, I can pay taxes myself quarterly based on the number of hours I've actually worked in that quarter. As if I were an independent contractor.

 

[cbg]

However, unfortunately some HR departments don't understand that it is their responsibility to determine how much basic withholding there should be...they expect the employee to determine it even though the form doesn't really allow for that

May I ask why it is the responsibility of HR and not Payroll? (Yes, I understand that in many small businesses both are handled by the same people. I'm talking about when they aren't.)

 

[LdiJ]

May I ask why it is the responsibility of HR and not Payroll? (Yes, I understand that in many small businesses both are handled by the same people. I'm talking about when they aren't.)

Yes, then of course it's payroll.

 

[LdiJ]

Thank you for this. It's actually restored some sanity to my brain! It used to be that filling out a W-4 form was one of the easiest tasks on earth. It's amazing to me that now one must consult a tax expert in order to do so.

My biggest concern is that if I designate an amount to be deducted from my check every two weeks, there may come some pay periods in which I might have worked less (taken a day or two off for some reason) and thus the amount that I had designated to be taken out of my checks may eat up anything that I'd end up with by working just a day or two in that pay period.

I have an appointment with HR Block on Tuesday to ask questions and figure out what the best way to go might be. Perhaps if I just keep the W-4 as it is, I can pay taxes myself quarterly based on the number of hours I've actually worked in that quarter. As if I were an independent contractor.

Some people choose to do it that way. Some people choose to have taxes come out of their SS benefits instead.

 

[cbg]

Yes, then of course it's payroll.

Thank you.

Since there are more employers where they are two different departments than there are when they are the same, it's nice to know that HR is not expected to be a tax expert in addition to everything else they're held responsible for that should be done by others within the company. (Yes. I am being sarcastic.)

 

[LdiJ]

Thank you.

Since there are more employers where they are two different departments than there are when they are the same, it's nice to know that HR is not expected to be a tax expert in addition to everything else they're held responsible for that should be done by others within the company. (Yes. I am being sarcastic.)

I was not aware that it is more common to have two different departments or I would have said payroll rather than HR.

 

[Jay968]

Some people choose to do it that way. Some people choose to have taxes come out of their SS benefits instead.

I do have taxes deducted from my SS benefit each month. I figured though that since I will also owe state tax with this job, I might as well take some extra fed out as well.
In researching all this, I have read that with the new W-4 from last year, more and more employers are doing what they can to leave it up to the employee to figure it all out and deal with it as this new W-4 is confusing even payroll departments.
The more I think about just making quarterly payments to both the IRS and my state, the more I like it. This way I hold onto the money and get some interest on it, and adjust each quarter according to what I've actually made.

 

[zddoodah]

WHY do they refuse to take out fed or state taxes on these paychecks?

It seems likely to me that you're not making enough to hit the threshold for federal or California withholding.

I responded by saying that I was not asking for tax advice, I just wanted to know "why there is no tax withholding in my paychecks. Isn't an employer obligated to do so?"

An employer is obligated to withhold federal and state taxes if the employee makes enough to warrant withholding.

I will also owe state tax with this job

Why do you think that? If your gross income is $210 per week ($14 x 15 hours/week x 50 weeks = $10,500/year), you will not owe any California state tax, so there should be no state withholding.

I fear I will owe hundreds plus penalties come next April if I let it go.

Even if you are under-withholding slightly, the likelihood of any penalties based on your withholding is virtually non-existent.

 

[PayrollHRGuy]

Step 4 Line C allows you to enter an additional amount to be withheld each pay period. Fill out a new W4 and give it to your employer.

https://www.irs.gov/pub/irs-pdf/fw4.pdf

 

[Jay968]

With all due respect, some of you need to read the entire thread before commenting...
As I said in my original post, my wife makes over $100,000. I am getting social security. So between the two of us filing jointly we make over $130,000/year. This job adds to that, so the thought that I am not making enough per paycheck to have taxes deducted won't fly come tax time next April. I WILL owe, as my gross income is NOT $210 per week with all this taken into consideration.
As I have said, yes I know I can enter an additional amount on the W4, I have already designated $20 for that, but I don't think that will be enough. If I designate more, I run the risk of having most or all of my paycheck go to taxes if I happen to work only one day in a pay period (it's a part time job, it CAN happen).
When I mentioned all this to payroll, his response was that he is not a tax expert and cannot help me. I have also asked others in the same position as I am in if they have taxes deducted and was told yes, they do.
Basically I have come to the conclusion that with the new W-4 form that appeared a year ago (the one that you need a PHD to figure out), even payroll departments don't want to be bothered if they can avoid it and would rather leave it up to the employee to do the work. Those who ARE having taxes taken out, are ones who have been there for several years, and signed up using the old, sensible W-4. Have any of you had to fill out a W-4 for a new job this year? It's a disaster.
Anyway, I have an appointment with HR Block tomorrow to have them help me figure this out. I am pretty sure that what will end up happening is that I will make quarterly payments to the IRS and the state based on my own calculations. I am sure it will make the payroll department very happy that I am doing their job!

 

[PayrollHRGuy]

With all due respect, some of you need to read the entire thread before commenting...
As I said in my original post, my wife makes over $100,000. I am getting social security. So between the two of us filing jointly we make over $130,000/year. This job adds to that, so the thought that I am not making enough per paycheck to have taxes deducted won't fly come tax time next April. I WILL owe, as my gross income is NOT $210 per week with all this taken into consideration.
As I have said, yes I know I can enter an additional amount on the W4, I have already designated $20 for that, but I don't think that will be enough. If I designate more, I run the risk of having most or all of my paycheck go to taxes if I happen to work only one day in a pay period (it's a part time job, it CAN happen).
When I mentioned all this to payroll, his response was that he is not a tax expert and cannot help me. I have also asked others in the same position as I am in if they have taxes deducted and was told yes, they do.
Basically I have come to the conclusion that with the new W-4 form that appeared a year ago (the one that you need a PHD to figure out), even payroll departments don't want to be bothered if they can avoid it and would rather leave it up to the employee to do the work. Those who ARE having taxes taken out, are ones who have been there for several years, and signed up using the old, sensible W-4. Have any of you had to fill out a W-4 for a new job this year? It's a disaster.
Anyway, I have an appointment with HR Block tomorrow to have them help me figure this out. I am pretty sure that what will end up happening is that I will make quarterly payments to the IRS and the state based on my own calculations. I am sure it will make the payroll department very happy that I am doing their job!

You have information that your payroll department doesn't have or can't do anything with if they do have it. As mentioned earlier there is a box on the W4 where you can enter an additional amount to be deducted. Most states that have withholding tax have something like it as well.

 

[Jay968]

You have information that your payroll department doesn't have or can't do anything with if they do have it. As mentioned earlier there is a box on the W4 where you can enter an additional amount to be deducted. Most states that have withholding tax have something like it as well.

Yes! As I have said multiple times now, I am aware of that box and have used it to designate additional amounts. I do not want to designate any more because if I am telling payroll to deduct more, I may end up with a situation in a given pay period where if I only work one or 2 days, I may not see any (or very little) take home pay at all.

For instance, on the average, I'd say a $50 deduction for a pay period would be adequate. BUT while they try and make the schedules consistent, they cannot always do so. Lets say for whatever reason, (scheduling, or taking a day off for a Dr. appointment, etc.) I only work 1 day in a given 2 week pay period (thus making only $60). Well after the deduction (plus union dues and medicare) I'd end up breaking even! Why would I work at all that day? If I could designate a PERCENTAGE on the W-4 rather than a certain dollar amount, it would be a different story! But I can't. I have to designate a certain dollar amount.

As I've said, I think the ideal thing to do is to just figure out myself how much to send the IRS quarterly. I will do so once I talk with HR Block about doing so.

What bugs me the most though is that before the W-4 changed last year, none of this was a problem. I've been doing my own taxes without the need of a tax consultant for 50 years. But last year, someone had to come along and attempt to simplify things when in fact making it next to impossible to figure out without paying someone to explain it to you.

I came here wondering whether someone might tell me that yes, my employer needs to deduct taxes no matter how much I make. But apparently this is NOT the reality and I cannot expect it to happen. So I need to deal with it myself.