Brett wrote:

- quote -

You've got the answer now I think. With a company that small,
chances are you could merely talk to bookkeeper and get him
to increase withholding temporarily without a new W4 form.

Use of the 1040ES will raise absolutely no red flags with IRS.

- quote -

I think it does. Look on page 1, "Who must make......"
there is the bit about at least 1000$ in added tax.

And believe me, many employees even with what they consider
a correct W4 form on file find themselves in this position
on Dec 31st! Esp when employer paid a big fat bonus and only
withheld 20%!

Remember also that even IF the IRS wrote regulations and
instructions completely understandable (hah!) there's no
way they would or could cover every situation.

ChEAr$,
Harlan Lunsford, EA n L

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- quote -

As someone else has already noted, there is an advantage to
having tax withheld -- in that, it is treated as having been
paid in equal installments over the tax year. On the other
hand, _estimated tax payments_ are technically required to
be made to match the income stream throughout the year.
Therefore, if your tax due in the previous year was _more_
than the total amount you have already had withheld during
2004, you could come up short on the timeliness of your
estimated payment(s).

However, that technical difference usually only gets noticed
if your total of withholding and estimated payments are
grossly less than the tax due for the year.

And, if you're planning to make these extra payments using
1040ES because you've had unexpected income during the past
couple of months, you would have no problem since your
payment(s) of estimated tax would be timely with regard to
the additional income.

Finally, as someone else also noted, there is a "safe
harbor" consideration, in that you will not be assessed a
penalty if the total of your taxes withheld and estimated
payments are equal to - or exceed - the previous year's tax
due.

- quote -

I'm not sure what leads you to the conclusion that the
1040ES "seems more for first time filers" ... but it is
definitely appropriate for those who have greater income tax
liability than the amount withheld from their paycheck. For
example, anyone who has dividend or investment income above
and beyond their salary may (and frequently does) use
estimated payments to supplement withholding and avoid
underpayment penalties.

If, on the other hand, the taxpayer has *deliberately*
reduced withholding (as a result, say, of greatly
overstating dependents) ... and that is the sole reason for
estimated tax payments, then IRS may take a sterner view of
timely payment issues.

Bill

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Someone please correct me if I'm wrong, but I thought that
once you pay estimated tax using 1040-ES, you have to break
down your withholding and estimated tax payments for the
entire year by quarter and prove that you paid enough each
quarter, whereas if you increase your withholding without
paying estimated tax, the withholding is averaged over the
whole year regardless of when it was actually withheld?

In other words, I thought that paying estimated tax even
once could open you up to underpayment penalties for some
quarters even if the total tax paid for the entire year was
sufficient.

If that's not always the case when estimated tax is paid,
then could someone clarify when that can happen and when it
can't?

Thanks.

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"Bill" <an_ordinary_guy_158[at]hotmail.com> wrote:
- quote -

Thanks Bill. The company is only 9 people. I don't want to
put this responsibility in the supervisor's hands. I feel
it will not be taken care of in the proper time period for
any number of reasons. I believe your and the many other
suggestions on using a 1040 ES is best. This gives me
control and ensures timely payment.

I'll use payment voucher 4, due on Jan 18, 2004. It will be
mailed in before the end of this year. Will using form 1040
ES raise any type of flags with the IRS vs. withholdings
from my paycheck?

Also, form 1040 ES seems more for first time filers and
those making quarterly payments. Most people have taxes
taken directly out of their paycheck. Why doesn't the 1040
ES mention its use for those needing to make payments
because of under payment?

Thanks,
Brett

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Bill <an_ordinary_guy_158[at]hotmail.com> wrote:
- quote -

There's a difference.

The withheld amount can be considered withheld ratably over
the full year, $250/quarter. An estimated tax payment would
be considered paid in the fourth quarter. The difference
could easily affect the total due.

Seth

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You also can pay an estimated tax by Jan 15. Simple form
available on web or in library. Dont have to monkey around
with payroll then. You may not need to pay the $1000 if your
tax paid so far in 2004 was as much as 2003, but there are
too many rules to list here Look them up in a tax program or
IRS site.

If you file by Jan 31, then you dont have to wory about the
Jan 15 date. But all the paperwork may not be available by
that date.

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- quote -

Harlan, I'm not sure what your point is here. The plain
text of what the OP wrote above seems to make it clear that
he takes it as a given that he will have to submit a new W-4
and then submit another one next year to undo the "damage."
I don't think he was asking how to make it happen without
submitting a new W-4.

It seems to me that any employer who allows itself to be
"persuaded" to change withholding for an employee without a
new W-4 has violated IRS regulations.

- quote -

Perhaps it's common knowledge to the CPA's and/or EA's in
this newsgroup that employers do not need to allow additional
withholding to be specified on the Form W-4, but this is the
first I've heard of it, and I can't find any mention of it in
Pub. 15. Pub. 15 seems to make it clear that if an employee
submits a W-4, and the employer has no reason to believe that
the W-4 is invalid, the employer must withhold as specified
on the W-4, including any additional withholding requested by
the employee.

If you believe that's not the case, can you provide some
documentation so support your position?

I should point out that I'm asking whether the IRS regulations
allow an employer to refuse to do additional withholding. I'm
not talking about employers who refuse to do it in violation
of IRS regulations; I'm well aware that just because the
regulations require an employer to do something doesn't mean
it'll happen.

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"Brett" <no[at]spam.net> wrote:

- quote -

It would be a lot easier to send in the $1000 along with a
form 1040ES before January 15th. If you change the form W-4
they may not take anything out until January for 2005. And
then you would have to change it again to stop taking it out
of each paycheck.

Missy Doyle

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- quote -

You have to talk to someone in your company's payroll
department. They will tell you how to do it.

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Brett wrote:

- quote -

YOu MAY be able to persuade our employer to do this. I have
several clients who can.

But your employer may toe the line and insist on a new W4
form. So far so good, but then after Dec 31st, you must
remember to submit another.

Oh, and if the way you fill out the form is to request added
amounts be withheld (like the 500$ each payday you mention
above), just remember, that employer does not HAVE to agree
to do this.

So if he doesn't agree, you should send in the 1000$ with a
form 1040-ES by January 15th next year. See the web site
(www.irs.gov) for the form.

ChEAr$,
Harlan Lunsford, EA n LA

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"Brett" <no[at]spam.net> wrote:

- quote -

You need to talk to your payroll department to find out how
quickly they process the changes.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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- quote -

This is controlled by your employer or payroll service. Ask
them about lead times.

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"Brett" <no[at]spam.net> writes:

- quote -

Your employer has complete control over when a new W-4 takes
effect. Talk to whoever processes W-4's at your place of
employment and ask them how far in advance they need the W-4
to ensure that it takes effect for both December paychecks,
and what you should do to ensure that it doesn't take effect
earlier.

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"Brett" <no[at]spam.net> wrote:

- quote -

Talk to your payroll department, as their processing time
will determine WHEN to submit the corrected W-4 form. In any
case, revisit the issue in early 2005 to modify the W-4 form
back to what it should be.

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no[at]spam.net (Brett) posted:

- quote -

You don't say how large your employing company/organization
is, but here are some answers:

1) In most cases, simply get a W-4, filling out the
appropriate identifying info and indicate clearly that you
are requesting a special withholding for the period in
question (Dec 1 through Dec 31, 2004), and specify the sum
of $500 for each pay period. Attach an explanatory note to
the W-4, with your statement of intent [that you wish to
increase the total withheld to meet required timely tax
payment schedules.

2) In a small company, hand-carry it to the accountant,
bookkeeper or other responsible person.

3) In a larger company, either hand-deliver it to "Human
Resources," "Personnel" or "Payroll Dept" -- as applicable
.... or mail the form to the location of the department.

In any event, if unsure, you should inquire of your
supervisor exactly where the request should be directed.

Some bureaucracies may resist. In those cases, you can
always make a separate filing with 1040-ES and use your own
December paycheck income for a personal check in the amount
of $1,000 -- being sure to mail it before the end of the
year, so it will be an actual 2004 payment.

Bill

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I want to withhold $1000 in December since I haven't paid in
enough in federal taxes through out this year. This
requires changing my W-4. I say December so I can split the
difference on two paychecks (I'm paid twice/month), each
having $500. I need to time my W-4 change submission so
that it takes affect for those last two paychecks. If it
occurs in mid November, that might lead to $1500 being
withheld. If in mid December, that will only be $500.

How exactly is this done?

Thanks,
Brett

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