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  #6  
Old 07-01-2008, 07:25 PM
Seth
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Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?

In article <b56b6792-09e6-4ef3-bbef-f8d9bf106b64[at]j33g2000pri.googlegroups.com> ,
<PhilOssiferzStone[at]gmail.com> wrote:
- quote -

> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.


Not same everything. In the first 2-week pay period you earned (e.g.)
$1800. You were withheld based on annual pay of 26*$1800. In the
second period you earned $3600, and were withheld based on annual pay
of $26*3600, which is in a higher bracket.

Seth

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
  #5  
Old 07-01-2008, 01:27 AM
Brew1
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Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?

On Jun 30, 3:49*pm, PhilOssiferzSt...[at]gmail.com wrote:
- quote -

> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.
> I phoned this morning to find out what was afoot and the Chinese lady
> who does their payroll got all upset, insisting that 'the software do
> it all.' After a 20-minute wrangle I found out my next and last
> paycheck, again for two weeks, will be for another $2600. That leaves
> me about $800 shy of where I thought I'd be.
> Is Federal or CA state withholding *greater* if you have a longer pay
> period? Am I being dumb? Is this a wrinkle in our tax code I've simply
> never run into before in 15 years as an IT contractor? Or should I
> continue to make a bit of a fuss if I want my money now, as opposed to
> an end-of-tax-year refund?
> --


You can change the W-4 you have on file with the company. The lady is
correct,
every two weeks the computer software is making a calculation that
assumes: your annual income equals
gross pay times 26; withholding is adjusted for your filing status and
allowances claimed. It (the software)
doesn't know anything about other jobs, time spent unemployed, or if
you itemize. That's what the W-4 is for.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
  #4  
Old 06-30-2008, 10:50 PM
Alan
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Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?

Harlan Lunsford wrote:
- quote -

> Alan wrote:
> > There is no tax withholding for non-employees.
> > But OP said he worked for an employment agency, not for the company

> who contracted with that agency.
> Therefore, the employment agency's responsibility is to treat him
> as an employee and withhold accordingly.
> I hope the OP will respond and tell us if taxes were indeed withheld.
> ChEAr$,
> Harlan Lunsford, EA n LA

You may be correct. I just assumed that "through an employment
agency" meant that was how he obtained the contract. It is quite
possible that he is an employee of the agency and subject to
withholding.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
  #3  
Old 06-30-2008, 10:03 PM
Harlan Lunsford
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Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?

Alan wrote:
- quote -

> There is no tax withholding for non-employees.

But OP said he worked for an employment agency, not for the company
who contracted with that agency.
Therefore, the employment agency's responsibility is to treat him
as an employee and withhold accordingly.

I hope the OP will respond and tell us if taxes were indeed withheld.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
  #2  
Old 06-30-2008, 09:09 PM
Haskel LaPort
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Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?


<PhilOssiferzStone[at]gmail.com> wrote in message
news:b56b6792-09e6-4ef3-bbef-f8d9bf106b64[at]j33g2000pri.googlegroups.com...
- quote -

> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.
> I phoned this morning to find out what was afoot and the Chinese lady
> who does their payroll got all upset, insisting that 'the software do
> it all.' After a 20-minute wrangle I found out my next and last
> paycheck, again for two weeks, will be for another $2600. That leaves
> me about $800 shy of where I thought I'd be.
> Is Federal or CA state withholding *greater* if you have a longer pay
> period? Am I being dumb? Is this a wrinkle in our tax code I've simply
> never run into before in 15 years as an IT contractor? Or should I
> continue to make a bit of a fuss if I want my money now, as opposed to
> an end-of-tax-year refund?


As one moves up the payroll software food chain the ability to change the
annualization factor for each tax is available to the end user. In your case
if the software had this feature the HR lady could have entered 52 weeks as
the number of pays in the year for your first check instead of the default
26 weeks (Bi-Weekly).

The method used by the software was to multiply your pay by 26, calculate
the tax for the year and then divide that number by 26 to come up with the
tax withheld for that pay period.


In any event the HR lady under withheld taxes for your first check.

As a practical matter changing the annualization factor even if available,
is not performed that often in the real world.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
  #1  
Old 06-30-2008, 08:13 PM
Alan
Guest
 
Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?

PhilOssiferzStone[at]gmail.com wrote:
- quote -

> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.
> I phoned this morning to find out what was afoot and the Chinese lady
> who does their payroll got all upset, insisting that 'the software do
> it all.' After a 20-minute wrangle I found out my next and last
> paycheck, again for two weeks, will be for another $2600. That leaves
> me about $800 shy of where I thought I'd be.
> Is Federal or CA state withholding *greater* if you have a longer pay
> period? Am I being dumb? Is this a wrinkle in our tax code I've simply
> never run into before in 15 years as an IT contractor? Or should I
> continue to make a bit of a fuss if I want my money now, as opposed to
> an end-of-tax-year refund?

There is no tax withholding for non-employees.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
 
Old 06-30-2008, 08:12 PM
Phil Marti
Guest
 
Posts: n/a
Default Re: Different tax withholding for longer pay periods....? WTF?

<PhilOssiferzStone[at]gmail.com> wrote:

- quote -

> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.
> I phoned this morning to find out what was afoot and the Chinese lady
> who does their payroll got all upset, insisting that 'the software do
> it all.' After a 20-minute wrangle I found out my next and last
> paycheck, again for two weeks, will be for another $2600. That leaves
> me about $800 shy of where I thought I'd be.


You may also be shy of where you need to be with CA and the IRS.

Withholding tables assume that your income is steady throughout the year.
Thus, when withholding was calculated for your first paycheck, it was
calculated as if you would gross that amount every 2 weeks throughout the
year. IOW, withholding was based on an annual income half of what it really
is.

You should stash some cash where you can find it April 15, because you may
wind up with a balance due. Estimate this amount by subtracting the amount
withheld for income tax from the smaller paycheck from the amount withheld
from one larger paycheck, then divide by 2.

It works the same with payroll clerks without accents.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
  #-1  
Old 06-30-2008, 07:49 PM
PhilOssiferzStone@gmail.com
Guest
 
Posts: n/a
Default Different tax withholding for longer pay periods....? WTF?

Howdy. I'm a California tech contractor (I'm a technical writer) that
just finished up a 5-week contract through an employment agency. Long
story short: they apparently pay bi-weekly. My first check was for one
weeks' pay, and was slightly in excess of $1500. The next payment for
two weeks' pay was around $2600. Same hourly rate, same project, same
everything.

I phoned this morning to find out what was afoot and the Chinese lady
who does their payroll got all upset, insisting that 'the software do
it all.' After a 20-minute wrangle I found out my next and last
paycheck, again for two weeks, will be for another $2600. That leaves
me about $800 shy of where I thought I'd be.

Is Federal or CA state withholding *greater* if you have a longer pay
period? Am I being dumb? Is this a wrinkle in our tax code I've simply
never run into before in 15 years as an IT contractor? Or should I
continue to make a bit of a fuss if I want my money now, as opposed to
an end-of-tax-year refund?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >
 

Tags
longer, pay, periods, tax, withholding, wtf
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