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Lutherf

Lutherf

DP Veteran
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Tucson, AZ
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Just had a client come in and ran their return to see where they'd be for 2018. Client would have saved roughly $2k under new tax law. Checked their pay stubs to insure withholding was going to be sufficient for 2018. Her withholding dropped by more than $200 per pay period. That decrease would have meant that even with the decrease in tax due they would not have had enough withheld and would have owed next April. I have no idea how her employer figured the adjustment to withholding but it's been a concern of mine ever since this "Everyone will see more in their paycheck" stuff started.

Her employer, by the way, employs 10's of thousands of people in Arizona and would be an outfit most people would assume was capable of thinking this kind of thing through.
 
Probably figured no one would notice, due to direct deposit.


Last time I looked at my pay "stub" was over a year ago, to see what difference weekly my raise was.
 
Lutherf said:
Just had a client come in and ran their return to see where they'd be for 2018. Client would have saved roughly $2k under new tax law. Checked their pay stubs to insure withholding was going to be sufficient for 2018. Her withholding dropped by more than $200 per pay period. That decrease would have meant that even with the decrease in tax due they would not have had enough withheld and would have owed next April. I have no idea how her employer figured the adjustment to withholding but it's been a concern of mine ever since this "Everyone will see more in their paycheck" stuff started.

Her employer, by the way, employs 10's of thousands of people in Arizona and would be an outfit most people would assume was capable of thinking this kind of thing through.
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And just try, just try saving that weekly for the tax bill.
I used to have a full-time job and work Saturdays on a maintenance overload shift in the sawmill for a different contractor. Their computer program thought I wasn't making enough annually to pay taxes so it didn't deduct anything. When I could I'd pay a lump sum quarterly but it was still a pain in the butt every spring.
 
WarmPotato said:
Could someone simplify things for me? XP
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Be careful what you ask for. "Simple" would be to not get a paycheck at all but have the government send you whatever they figure you're worth every month.
 
Lutherf said:
Just had a client come in and ran their return to see where they'd be for 2018. Client would have saved roughly $2k under new tax law. Checked their pay stubs to insure withholding was going to be sufficient for 2018. Her withholding dropped by more than $200 per pay period. That decrease would have meant that even with the decrease in tax due they would not have had enough withheld and would have owed next April. I have no idea how her employer figured the adjustment to withholding but it's been a concern of mine ever since this "Everyone will see more in their paycheck" stuff started.

Her employer, by the way, employs 10's of thousands of people in Arizona and would be an outfit most people would assume was capable of thinking this kind of thing through.
Click to expand...
See, that's the problem with this "see it in your check" mentality.

Your check size is based upon withholding. No one will know their new tax implications, until they file next year!

But I'm wondering:

Was the mistake with the organization incorrectly implementing the government's withholding tables? Or was there an issue with the tables themselves?
 
Lutherf said:
Just had a client come in and ran their return to see where they'd be for 2018. Client would have saved roughly $2k under new tax law. Checked their pay stubs to insure withholding was going to be sufficient for 2018. Her withholding dropped by more than $200 per pay period. That decrease would have meant that even with the decrease in tax due they would not have had enough withheld and would have owed next April. I have no idea how her employer figured the adjustment to withholding but it's been a concern of mine ever since this "Everyone will see more in their paycheck" stuff started.

Her employer, by the way, employs 10's of thousands of people in Arizona and would be an outfit most people would assume was capable of thinking this kind of thing through.
Click to expand...

Thanks! I'm raising mine back up untilI can figure it out. I'm doing my taxes this weekend, so I'll know better then. Hate giving up that extra money, but I'd hate paying at the end of the year more!
 
Chomsky said:
See, that's the problem with this "see it in your check" mentality.

Your check size is based upon withholding. No one will know their new tax implications, until they file next year!

But I'm wondering:

Was the mistake with the organization incorrectly implementing the government's withholding tables? Or was there an issue with the tables themselves?
Click to expand...

In the specific case I'm talking about I expect that it was a decision made by the organization. Near as I can tell the change occurred before the new withholding tables were released.
 
holbritter said:
Thanks! I'm raising mine back up untilI can figure it out. I'm doing my taxes this weekend, so I'll know better then. Hate giving up that extra money, but I'd hate paying at the end of the year more!
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Just do a simple calculation. If you have a pretty good idea of how much you'll make in 2018 then just crunch the numbers for how much tax you'll owe. Then look at your pay stub, multiply the amount of FWT on it for the mosr recent pay period by the number of pay periods you have left in the year, add that to what is reported as YTD withholding and you'll know whether you have enough withheld or not.
 
Gina said:
I've been watching this page to see when they are going to update the tax calculator:

https://www.irs.gov/individuals/irs-withholding-calculator

Am I looking on the wrong page?
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Once they get the calculator up and running it will be the right page. For now the tables are here - https://www.irs.gov/pub/irs-pdf/n1036.pdf

-edit-

I just want to clarify something, if you're married and your spouse works you need to be VERY careful when doing this calculation and make sure you're looking at your combined income. Where this whole process goes off the rails is if you consider each spouse separately it might look like enough tax is being withheld but when you combine that income you jump a bracket and need to play catch up. The jump from 15% to 25% or 12% to 22% is a big jump and you want to make sure you're accounting for it. My guess is that's where my client's situation came from. If we only considered her income she'd have been fine but throw in her husband's income and she's not having anywhere near enough withheld.
 
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Lutherf said:
Just had a client come in and ran their return to see where they'd be for 2018. Client would have saved roughly $2k under new tax law. Checked their pay stubs to insure withholding was going to be sufficient for 2018. Her withholding dropped by more than $200 per pay period. That decrease would have meant that even with the decrease in tax due they would not have had enough withheld and would have owed next April. I have no idea how her employer figured the adjustment to withholding but it's been a concern of mine ever since this "Everyone will see more in their paycheck" stuff started.

Her employer, by the way, employs 10's of thousands of people in Arizona and would be an outfit most people would assume was capable of thinking this kind of thing through.
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But Trump and republicans want people to think they are getting money to dupe them into voting for them in the midterms. And conveniently after the midterms will be when they find out they have been duped. Trump asked the IRS to take more out, not sure if they are, just for that purposes. Why do people continually fall for obvious republican tricks?

People will be pissed if they owe money at the end of the year. I love the tax returns, its like free money (yeah, I know its not but I'd rather have it)
 
Sampson Simpson said:
But Trump and republicans want people to think they are getting money to dupe them into voting for them in the midterms. And conveniently after the midterms will be when they find out they have been duped. Trump asked the IRS to take more out, not sure if they are, just for that purposes. Why do people continually fall for obvious republican tricks?

People will be pissed if they owe money at the end of the year. I love the tax returns, its like free money (yeah, I know its not but I'd rather have it)
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Yeah, it's all Trump's fault:doh

This is not a new problem. It's been happening for a long time but with the new changes people need to review their situation.
 
Chomsky said:
See, that's the problem with this "see it in your check" mentality.

Your check size is based upon withholding. No one will know their new tax implications, until they file next year!

But I'm wondering:

Was the mistake with the organization incorrectly implementing the government's withholding tables? Or was there an issue with the tables themselves?
Click to expand...

There could be an issue with the tables. People will still be in their merry "see it in your check" mindset come the November elections. They will get hit with the bill in 2019. This will certainly hurt those who have come to rely on their spring refund to catch up on holiday bills.

There is this same "see it in your check" mindset when it comes to bonuses. Yes, a bonus is very nice, but it is not a wage increase. It is a one time thing. The full time employee is much better off with a 25 cent an hour raise than a $1,000.00 bonus.
 
Lutherf said:
Once they get the calculator up and running it will be the right page. For now the tables are here - https://www.irs.gov/pub/irs-pdf/n1036.pdf

-edit-

I just want to clarify something, if you're married and your spouse works you need to be VERY careful when doing this calculation and make sure you're looking at your combined income. Where this whole process goes off the rails is if you consider each spouse separately it might look like enough tax is being withheld but when you combine that income you jump a bracket and need to play catch up. The jump from 15% to 25% or 12% to 22% is a big jump and you want to make sure you're accounting for it. My guess is that's where my client's situation came from. If we only considered her income she'd have been fine but throw in her husband's income and she's not having anywhere near enough withheld.
Click to expand...

Hmmm...using that chart, my withholding should be what they were taking out before the change.
 
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