<na> W4 tax form help </>

denverpilot said:
Which still wouldn’t lower his take home. Go read up on how progressive tax brackets actually work.
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I know how it works. Probably shouldn't have used the 'bracket' word to reflect that if you usually get say $5000 a month and then one month you get $6000, the 'rate' for that month is going to be higher. It will be based on the assumption that your annual income is going to be 6000x12=72000 and withhold accordingly. Thats going to be at a higher rate than the 5000x12=60000. Of course the underwitholding the other 11 months will offset it somewhat. 5000 for 11 months and 6000 for one comes out to 61000. A few payperiods with a big spike will result in having over witheld at the end of the year.
 
hindsight2020 said:
That's not how progressive tax brackets work.
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denverpilot said:
Beat me to it. Hah. How the hell does this silly broken notion of tax brackets continue to be believed by so many people?

You’re only taxed at the higher rate on money that goes above the bracket limit. Money earned below the limit is still taxed at the lower rate.

A raise always therefore, is a raise.
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I know; was written in jest. My attempts at humor are often lost on my wife and kids too, and they have the benefit of the body language and voice inflection. I'll go back into lurker mode now.
 
So I am not so inclined to do it on my own, mainly because I have no W4 income, but it would be interesting to see if the 2017 withholding form yields the same result of a smaller paycheck. Seems your paycheck should be larger unless something has happened to your income.
 
luvflyin said:
I know how it works. Probably shouldn't have used the 'bracket' word to reflect that if you usually get say $5000 a month and then one month you get $6000, the 'rate' for that month is going to be higher. It will be based on the assumption that your annual income is going to be 6000x12=72000 and withhold accordingly. Thats going to be at a higher rate than the 5000x12=60000. Of course the underwitholding the other 11 months will offset it somewhat. 5000 for 11 months and 6000 for one comes out to 61000. A few payperiods with a big spike will result in having over witheld at the end of the year.
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Van Johnston said:
I know; was written in jest. My attempts at humor are often lost on my wife and kids too, and they have the benefit of the body language and voice inflection. I'll go back into lurker mode now.
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I just run into people all the time when trolling boards for fiscal counseling and helping folks who are trying to get out of debt, who think they need to not get a raise because “It’ll bump me into the next tax bracket!”

They think they’ll be taxed at the higher rate for all of their income.

Drives me batty. I react strongly to it anymore. It’s a misconception that just won’t die.

Kinda like the downwind turn fallacy. :)
(Shots fired!!!)
 
denverpilot said:
I just run into people all the time when trolling boards for fiscal counseling and helping folks who are trying to get out of debt, who think they need to not get a raise because “It’ll bump me into the next tax bracket!”

They think they’ll be taxed at the higher rate for all of their income.

Drives me batty. I react strongly to it anymore. It’s a misconception that just won’t die.

Kinda like the downwind turn fallacy. :)
(Shots fired!!!)
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Pfft, I was in a situation with a structured payment for a couple of years that was paid as salary, on top of that I was working a job for that company at a nice salary, except with that first payment anything I was making for actually working was taxed at like 39% plus the state was nicking another 5 and a 1/4 or so off of it for the state. That really sucked.
 
Kansas Flyer said:
Your responses indicate that you're stubborn and can't accept it when your arguments have been successfully refuted.

As for cash flow, I wonder what all those farmers that take in most of their annual income over the course of a month do? Oh wait, a budget.
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And what part of a budget of a farmer translates to the federal government?

I have yet to see any refuting. All I see are examples that have no bearing on the Feds having billions and billions in monthly disbursements and expenditures. Yet you magically want them to have 0 income for the next year and still have all these expenses they are obligated to pay in the mean time.

You would make an outstanding bureaucrat.
 
EdFred said:
And what part of a budget of a farmer translates to the federal government?

I have yet to see any refuting. All I see are examples that have no bearing on the Feds having billions and billions in monthly disbursements and expenditures. Yet you magically want them to have 0 income for the next year and still have all these expenses they are obligated to pay in the mean time.

You would make an outstanding bureaucrat.
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Ed, they operate on credit anyway. Floating it for 11 months wouldn’t even be a drop in the bucket of their debt load. Nothing whatsoever ties money collected to outgoing payments. It’s not a balanced budget system.

It’s just social engineering to constantly collect it and a convenient way to hide the total amount so someone doesn’t notice how large it is if they had to save it and write a single check for it.

Better to have dumb people focused on their “big refund” than on a large amount they didn’t save up to pay at the end of a year. Their assumption, and correctly, is that most people are fiscal ten year olds. Money in pocket, spend it.

There’s no legal hard connection between revenues collected and money paid out in any of the appropriation or spending bills. On purpose. The few that do have that have “escrow” style accounts like the Aviation Trust Fund from fuel taxes which are collected at the pump. But nearly nothing attaches to income taxes via direct connection.

It’s the “magic” General Fund where money magically appears for any politician to spend! Yay magic money pot!
 
Kansas Flyer said:
I believe you're thinking of the Land of Oz. If budgeted properly collecting taxes once or twice a year would change absolutely nothing and like I said before MY local county seems to manage this just fine.

Its really a moot point as i'm sure very few people would choose to forgo withholdings and pay all at once. Budgeting for anticipated taxes would be an unwanted inconvenience for most people so the impact of the few who might choose to do so would be minimal.
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If you're self employed it's quarterly (more or less) payments. Writing 5-figure checks every few months to governments is eye-opening.

The reason taxes are withheld "for your convenience" is that the a******* who run the government know that there would be a revolt if people paid from their own pockets.
 
denverpilot said:
There’s a box for “withhold this dollar amount per pay period” if you’re playing it that way. Look carefully at the main portion of the form, not the “worksheet” stuff attached to it.

Keep in mind there were some major tax changes for 2018. Severely under-withholding can lead to penalties, over-withholding just leads to a large refund and the government getting a long term loan from you.

We keep on top of our withholding numbers so there fairly close to “correct” and adjust as needed.

Last year I had $100 refund from State and $100 refund from Federal. Hard to do better than that. LOL.
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Last year we got $100 refund for the feds and owed the state $100. Net zero game. Close enough for me.
 
paflyer said:
If you're self employed it's quarterly (more or less) payments. Writing 5-figure checks every few months to governments is eye-opening.

The reason taxes are withheld "for your convenience" is that the a******* who run the government know that there would be a revolt if people paid from their own pockets.
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Agreed. I did contract consulting for 20 years as an S Corp. I firmly believe that if employees received their whole salary in their paycheck and paid quarterly taxes, we would have a tax revolt In very short order.
 
gkainz said:
Agreed. I did contract consulting for 20 years as an S Corp. I firmly believe that if employees received their whole salary in their paycheck and paid quarterly taxes, we would have a tax revolt In very short order.
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Math is hard. LOL.
 
Back to @SixPapaCharlie , if you are in the same year with the same income and the same elections on the W4, your withholdings should be the same. Have you compared an old company pay stub to a new company pay stub to determine if there is anything else different?
 
gkainz said:
Agreed. I did contract consulting for 20 years as an S Corp. I firmly believe that if employees received their whole salary in their paycheck and paid quarterly taxes, we would have a tax revolt In very short order.
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Exactly.
 
I've heard (and frankly, 5 minutes of google did not confirm) that Eisenhower advocated doing away with income tax withholding for just this reason. If folks had to write a check on April 15th for their entire tax bill they would end (or drastically reduce) income tax in short order.

I did find this interesting article containing an excerpt of an Eisenhower speech where he decried BOTH unbalanced budgets AND high taxes: https://www.forbes.com/sites/davidm...-tax-cuts-and-a-balanced-budget/#27c1f3b55047

How much our politics have changed...
John
 
SixPapaCharlie said:
1. How do I get the most $ on my checks (the gov't can have their cut in April)?
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On a serious note, to minimize your withholding, you need to figure out what the minimum is to avoid penalties for withholding, and then arrange to have that minimum amount withheld. Then you'll make up the difference April 15. The challenge is figuring out what that minimum is, especially if you have unpredictable income from investments. I don't remember the rules off the top of my head, but believe one of them is if you have XX% of previous year's tax bill withheld, then no penalties, no matter how much more your tax bill is this year. But I am not a CPA or attorney, and this is POA, and all the usual disclaimers apply.
 
Sam D said:
Certainly not for the rich as the headlines would have you believe.
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That one has been so repeated it’s covered in mold now. But you’d be amazed at how many idiots believe it. Must be true, they heard it on TV.
 
I filled it out like last year's. Let ya know how it works next payday
 
denverpilot said:
I just run into people all the time when trolling boards for fiscal counseling and helping folks who are trying to get out of debt, who think they need to not get a raise because “It’ll bump me into the next tax bracket!”

They think they’ll be taxed at the higher rate for all of their income.

Drives me batty. I react strongly to it anymore. It’s a misconception that just won’t die.

Kinda like the downwind turn fallacy. :)
(Shots fired!!!)
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Yeah. Like the Daddy Warbucks 'quit taxing me and my spawn' and the little people will do much better thang. (Hand grenade thrown, feel free to pull the pin and throw it back)
 
luvflyin said:
Yeah. Like the Daddy Warbucks 'quit taxing me and my spawn' and the little people will do much better thang. (Hand grenade thrown, feel free to pull the pin and throw it back)
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Spawn: Giving people a discount on taxes for breeding is dumb. :)

(Artillery returning fire...) :)
 
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