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What is the importance of correctly calculating income tax withholding and the possible problems with miscalculating it for the employee and the employer?
Wiki User
∙ 12y ago
Withholding tax, if not done correctly, can cause punitive damages severe enough to close a business. It is a highly regulated area that involves stipulated rate calculations and tax tables. Adhering to the taxing authority guidelines is imperative to avoid any penalties and interest, or other punitive measures. There are penalties of fines and possible imprisonment if wrong calculations are made. Employee penalties would be fines of up to $1,000 or imprisonment for up to one year or both
Wiki User
∙ 12y ago
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What is the word for Excess of your withholding and estimated tax payments?
Amount of taxes that were overpaid to the IRS The excess amount of your withholding and estimated tax payments would be the amount that is MORE than your federal tax liability on your correctly completed federal 1040 income tax return and would be the amount of the REFUND that you could possibly receive after sending your tax return to the correct IRS address. Overpayment amount of taxes
What is the importance of voucher verification report in banks?
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What do you do if your employer withholds the wrong amount of taxes?
File your income tax return correctly for the past year and fill out a new W-4 form for the new year that is going on and try to make sure that it does not happen again in the future years to come. You can fill out a new W-4 form any time that you think it may be necessary to make that you have the correct amount of income taxes withheld.The IRS has a useful tool available for this purpose called the IRS Withholding Calculator. Go to www.irs.gov choose Individual and then scroll down page and choose IRS Withholding Calculator.You can use the search box at www.irs.gov and type IRS Withholding CalculatorThis easy to use calculator can help you figure your Federal income tax withholding so your employer can withhold the correct amount from your pay. This is particularly helpful if you've had too much or too little withheld in the past, your situation has changed, or you are starting a new job.http://www.irs.gov/pub/irs-pdf/fw4v.pdfWhat makes you think the "wrong" amount was withheld? Did you specifically tell him,and authorize it by filing the W-4 correctly, exactly how much to withhold? If not, presumably he withheld how much your W-4 instructed...which can come to several different, but similar results, depending on which of the many methods his system uses to calculate the certain aspects. He is NOT responsible to determine how much tax YOU wanted, or needed, to have withheld. YOU direct it by YOUR W4.
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How low can you make not to have federal tax come out of check?
You DO NOT EVER HAVE ANY AMOUNT WITHHELD FROM YOUR NET TAKE HOME PAYCHECK. From your gross pay wages this amount would depend on the information that you entered on your W-4 form that you filled out correctly and gave to your employer payroll department. You should ask the employer payroll department for the answer that you think you need for this question as they would would be the only one that would know the correct amounts of all of the different withholding amounts that they will be required from your gross wages NOT from your NET take home pay check.
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A person payroll withholding statement summarizes federal state and local tax deductions true or false?
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How are income taxes primarily collected in the US?
By the withholding of taxes from the source of the income and when taxpayers file and pay quarterly estimated taxes with the pay as you earn income system and after the end of the tax year when the taxpayer completes the income tax return correctly and pays any remaining taxes that may be owed after the income tax return is completed correctly. Study Island answer: tax withholding
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