Question about withholding

[PayrollHRGuy]

Look at the link. It is pretty black and white.

 

[Jay968]

Looking at the 2021 Publication 15-T (irs.gov) linked above the withholding about is ZERO for a married filing jointly until you get to $975.00 in a biweekly pay period.

At the suggestion of HR, I even changed my status to "single" and that too made no difference whatsoever.

Again my basic wonder is why, even with a $550 check there is STILL no withholding. I am not questioning the IRS publication, or how the system now works. Just why doesn't even a $550 check have any withholding. A $550 bi weekly check would come to over $14,000 per year.

 

[LdiJ]

The only deductions on my checks at all are:
1 - My own "extra" amount that I designated on the W-4
2 - A few dollars for medicare
3 - Anywhere from about $12 to $20 for a retirement fund that I will never see because I will never work there long enough for it to be vested.
No Federal (other than my "extra,") no state, and no SS (It is a local city govt. so they say they do not take out SS).

The 12-20 they are taking out for the retirement fund replaces SS. That is quite common for state and local government employees. It is also common for police departments and fire departments. It is a shame that you will never be vested. I am however surprised that they are not withholding any state tax. However you may be under the limit for state tax as well.

 

[LdiJ]

At the suggestion of HR, I even changed my status to "single" and that too made no difference whatsoever.

Again my basic wonder is why, even with a $550 check there is STILL no withholding. I am not questioning the IRS publication, or how the system now works. Just why doesn't even a $550 check have any withholding. A $550 bi weekly check would come to over $14,000 per year.

I think that you are just going to have to accept that they are not going to withhold any income tax for you, and plan accordingly. You are dealing with a local government agency and you won't change them no matter what you attempt to prove to them.

 

[Jay968]

Looking at the 2021 Publication 15-T (irs.gov) linked above the withholding about is ZERO for a married filing jointly until you get to $970.00 in a biweekly pay period.

So if I make $970 every two weeks coming to $25,200 I am not liable for any taxes?

I know the answer to that, I am just being sarcastic.

 

[Jay968]

I think that you are just going to have to accept that they are not going to withhold any income tax for you, and plan accordingly. You are dealing with a local government agency and you won't change them no matter what you attempt to prove to them.

I appreciate that. I actually don't expect to change them nor prove anything, I just want to understand what is going on.

 

[LdiJ]

So if I make $900 every two weeks coming to $25,200 I am not liable for any taxes?

You are going to be liable for taxes on the income you have now, because your wife has income and you have SS benefits. So yes, you would also be liable at $900.00 every two weeks.

 

[LdiJ]

I appreciate that. I actually don't expect to change them, I just want to understand what is going on.

I personally think that what is going on is that their systems have not adapted well to the new changes. They are accurate in general, but that some people, like you, are ending up falling through the cracks a bit.

 

[Jay968]

You are going to be liable for taxes on the income you have now, because your wife has income and you have SS benefits. So yes, you would also be liable at $900.00 every two weeks.

Yes I know this. This is why I ask questions rather than take for granted that they have my best interest in mind.
Frankly, the entire thing does seem like a scam by the govt. designed to get a bunch of poor souls to pay penalties in April for under withholding during the year.

 

[Jay968]

What I need to do is do my own calculations starting in January and send in quarterly payments next year. I did think of that and HR Block suggested I do this starting next year as I have not really made enough this year from this job.

Think I will just do that and stop questioning things. It's not good for my stress level.

 

[LdiJ]

Yes I know this. This is why I ask questions rather than take for granted that they have my best interest in mind.
Frankly, the entire thing does seem like a scam by the govt. designed to get a bunch of poor souls to pay penalties in April for under withholding during the year.

No, it is not a scam, it is just a poorly designed new system for withholding...just like the tax law changes that were not thought out as carefully as they should have been. Ronald Reagan and the Congress in his era did a much better job of tax law changes than this last go around.

 

[LdiJ]

What I need to do is do my own calculations starting in January and send in quarterly payments next year. I did think of that and HR Block suggested I do this starting next year as I have not really made enough this year from this job.

Think I will just do that and stop questioning things. It's not good for my stress level.

If you use a tax professional they can help you project out your estimated payment needs.

 

[PayrollHRGuy]

At the suggestion of HR, I even changed my status to "single" and that too made no difference whatsoever.

Again my basic wonder is why, even with a $550 check there is STILL no withholding. I am not questioning the IRS publication, or how the system now works. Just why doesn't even a $550 check have any withholding. A $550 bi weekly check would come to over $14,000 per year.

Clearly, you haven't read or understood the link that was posted.

 

[Jay968]

Clearly, you haven't read or understood the link that was posted.

Sorry, I have kept from responding the way I wanted to but it's clearly YOU who have not done much reading. You have said things to me and asked me questions that I have addressed multiple times. Frankly, it's been a bit annoying to have to repeat myself over and over. You just do not understand my basic question and keep assuming I am asking about or complaining about something which I am not.

I do appreciate your attempts though and I regret having to put it this way.

Others have understood me, made suggestions and even explained some things...some that have actually contradicted you.

Again, thanks for the attempt.

I'd like to ask that this thread be closed.

 

[quincy]

Sorry, I have kept from responding the way I wanted to but it's clearly YOU who have not done much reading. You have said things to me and asked me questions that I have addressed multiple times. Frankly, it's been a bit annoying to have to repeat myself over and over. You just do not understand my basic question and keep assuming I am asking about or complaining about something which I am not.

I do appreciate your attempts though and I regret having to put it this way.

Others have understood me, made suggestions and even explained some things...some that have actually contradicted you.

Again, thanks for the attempt.

I'd like to ask that this thread be closed.

Instead of closing another thread, I will flag Taxing Matters who is a tax attorney who posts to the forum to see if he can help. It appears, however, that LdiJ (a tax professional) has addressed your questions well.

@Taxing Matters