Accounting/Taxes Question

• se-alum

  

  This is probably a long shot, but thought I would ask anyway. Say you are expecting a lump sum payment from your employer that will be taxed as a typical paycheck. Is there away a way to figure out how many dependents to claim so that they take only what you want them to take in taxes?
  
  For instance, if the payment was 35k and you wanted them to take 10k in taxes, is there a way to figure how many dependents to claim for that pay period?
• FatHobbit

  

  I have no idea, but this might be a place to start
  
  http://www.hrblock.com/free-tax-tips-calculators/index.html
  
  
• se-alum

  

  FatHobbit;1093684 wrote:I have no idea, but this might be a place to start
  
  http://www.hrblock.com/free-tax-tips-calculators/index.html
  
  

  I've figured out what the Feds will be wanting come April of next year, I just need to figure out if there's a way to know how many dependents to claim to only have a certain amount of taxes witheld.
• jmog

  se-alum;1093697 wrote:I've figured out what the Feds will be wanting come April of next year, I just need to figure out if there's a way to know how many dependents to claim to only have a certain amount of taxes witheld.

  Easiest way I haev done this with bonus payments is to just adjust my dependants claim for the whole year.
  
  What I mean is, if your salary is $80k, and you are getting a bonus of $35k. Fill out your dependants as if you make $115k spread throughout the year.
  
  Your bonus check will still get taxed harder, but every regular check throughout the year will get taxed lighter to make up for this.
• FatHobbit

  

  Here's one that lets you input dependents
  
  http://www.efile.com/tax-service/tax-calculator/
• MorgansRaiders

  

  Where I work we have commission checks that we can request our taxes to be at a 25% or 30% rate. I don't know if the payroll dept at your employer will honor that?
• GoChiefs

  

  Just file exempt and give them bitches nothing until the end of the year.
• se-alum

  

  MorgansRaiders;1093713 wrote:Where I work we have commission checks that we can request our taxes to be at a 25% or 30% rate. I don't know if the payroll dept at your employer will honor that?

  My payroll dept. is the Federal Gov't...lol. I don't think I can do percentages, I can just adjust my dependents.
  

  GoChiefs;1093720 wrote:Just file exempt and give them bitches nothing until the end of the year.

  Then I have to make sure I don't spend it all before then!
• QuakerOats

  It sounds as if the payment is most likely to be construed as 'supplemental wages', which are generally taxed at a flat 25% for federal income taxes. There are several variables that can come in to play, but typically the employer is required to withhold at the supplement wage rate of 25%. You would then 'square up' when you filed your 1040 tax form and quite possibly get a refund if this caused you to be overwithheld for the entire year. See IRS Publication 15 (Circular E) Section 7 - Supplemental Wages.
• se-alum

  

  QuakerOats;1093763 wrote:It sounds as if the payment is most likely to be construed as 'supplemental wages', which are generally taxed at a flat 25% for federal income taxes. There are several variables that can come in to play, but typically the employer is required to withhold at the supplement wage rate of 25%. You would then 'square up' when you filed your 1040 tax form and quite possibly get a refund if this caused you to be overwithheld for the entire year. See IRS Publication 15 (Circular E) Section 7 - Supplemental Wages.

  Since you seem to know what you are talking about, this is the situation. My employer owes me right around $34k in backpay for a raise I was supposed to have over the last 3 years, and never received. So they'll just cut me a check for that money. So I'm afraid it's going to look like I made 34k in that 2 week time period, and it will put my yearly earnings up over 80k. So I figured they're likely to tax that lump sum at around 35%. I'm looking at owing the gov't around 12K come tax time next year. I want them to take 7-8K out of that 34k, and my taxes on my regular paycheck will be around 5-6k for the year, putting myself pretty safely above what I will have to pay, so I may even get a little refund. If they were to tax it at 25% as supplemental wages, I would be fine with that, but I don't know that they will.
• QuakerOats

  Back pay awards are considered 'supplemental wages', and in your case should be taxed at a flat 25% (although there are some nuances that can vary that). If you wanted, you could then tweak your dependents or withhold a flat amount on the rest of your wages throughout the remainder of the year to try and make things work out by year-end.
  
  See page 15 - Section 7 - Supplemental Wages http://www.irs.gov/pub/irs-pdf/p15.pdf
• dwccrew

  

  se-alum;1093723 wrote:My payroll dept. is the Federal Gov't...lol. I don't think I can do percentages, I can just adjust my dependents.
  
  
  
  Then I have to make sure I don't spend it all before then!

  Even a government worker is trying to fuck over the government. Reps
• WebFire

  You don't have to do it via independents. Just tell them you want 10k taken out. If they don't know how to that, they need different jobs.
• se-alum

  

  dwccrew;1094427 wrote:Even a government worker is trying to fuck over the government. Reps

  LOL...not really trying to screw them over, just want the money now instead of at refund time next year.
• QuakerOats

  WebFire;1094437 wrote:You don't have to do it via independents. Just tell them you want 10k taken out. If they don't know how to that, they need different jobs.

  Technically, it is not up to "them" to do it however you or they wish; they are required to follow IRS withholding guidelines (see above).
  
  Now, in reality, will this one-time situation ever get examined and cause the payer to get into hot water for not following proper withholding requirements - probably not.
• WebFire

  QuakerOats;1094586 wrote:Technically, it is not up to "them" to do it however you or they wish; they are required to follow IRS withholding guidelines (see above).
  
  Now, in reality, will this one-time situation ever get examined and cause the payer to get into hot water for not following proper withholding requirements - probably not.

  Maybe the lump sum is different? But on a w-4 you can name an amount to be withheld. It doesn't have to be by independents.
• se-alum

  

  QuakerOats;1093901 wrote:Back pay awards are considered 'supplemental wages', and in your case should be taxed at a flat 25% (although there are some nuances that can vary that). If you wanted, you could then tweak your dependents or withhold a flat amount on the rest of your wages throughout the remainder of the year to try and make things work out by year-end.
  
  See page 15 - Section 7 - Supplemental Wages http://www.irs.gov/pub/irs-pdf/p15.pdf

  Maybe I read it wrong, but it looked to me like they could either tax it as supplemental wage or tax it as they would a paycheck for a 2-week time period by not specifying the difference between the supplemental wages and regular wages.
• ZWICK 4 PREZ

  

  I don't get the whole "raise i was supposed to have over the last 3 years but never recieved" thing. You either are afforded a raise or not, right?
• se-alum

  

  ZWICK 4 PREZ;1100246 wrote:I don't get the whole "raise i was supposed to have over the last 3 years but never recieved" thing. You either are afforded a raise or not, right?

  After a year on the job, I was supposed to receive a "grade" increase, which is an increase of about $10,000/yr. When I went to my supervisor, at the time, to ask about it, he said I only get a step increase because I was hired on a student authority, and wouldn't get my grade until I completed school. Well this train of thought was passed through 2 other supervisors I have had since then. My newest supervisor and the HR rep, who are both new to their positions, questioned this. Come to find out, I should've gotten a grade increase after year one. I'm now going on 3 1/2 years of not having that increase, so they owe me $34k+ in backpay for the grade increase that is automatic as long as our yearly evaluation meets the criteria, which it does. So, I get the backpay, and will now be paid at the grade level I should've been for the previous 3 1/2 years. Basically, it was a screw up in our HR dept.
• ZWICK 4 PREZ

  

  se-alum;1100618 wrote:After a year on the job, I was supposed to receive a "grade" increase, which is an increase of about $10,000/yr. When I went to my supervisor, at the time, to ask about it, he said I only get a step increase because I was hired on a student authority, and wouldn't get my grade until I completed school. Well this train of thought was passed through 2 other supervisors I have had since then. My newest supervisor and the HR rep, who are both new to their positions, questioned this. Come to find out, I should've gotten a grade increase after year one. I'm now going on 3 1/2 years of not having that increase, so they owe me $34k+ in backpay for the grade increase that is automatic as long as our yearly evaluation meets the criteria, which it does. So, I get the backpay, and will now be paid at the grade level I should've been for the previous 3 1/2 years. Basically, it was a screw up in our HR dept.

  
  Jeez
• se-alum

  

  ZWICK 4 PREZ;1100682 wrote:Jeez

  Yea, I was pissed at first, because I've been paying for school out of my own pocket, and that has made money tight on occasions, but getting that big check will be nice, and give me the opportunity to do some things I should've had the money to do over the last few years.