Looks like my husband's employer changed his status from Married with 2 exemptions to Married with 3 exemptions beginning in February. Definitely going to check this!
Mid-size IWhen we received our W-2s we were absolutely in shock! Many of us went down to speak to HR and found this was done recently without our knowledge
They increased the rate of pay to people to increase the amount it takes to come up with the money when it comes time for taxes that all of a sudden have to be paid instead of earned. When this all goes down - there won't be a surplus of funds ... there will be a shortage ... combined with the electric bills of the middle U.S. there will be a massive shortage of funds circulating to the positive in the U.S.
Wait, so they said they paid more to employees than they did? What do you mean by “they increased the rate of pay?” Because my wife and I worked for the same company and both our W2s seem high on the wages. Haven’t had time to verify yet.
They've increased the amount of dependents on many people's tax returns- this increases the amount of work pay but decreases the amount of tax return pay .... it causes an employee to pay more in taxes at the end of the year.
If a person files correctly ... meaning they file the amount they are supposed to pay and not what their company said ... it will cause a huge discrepancy in what is owed ... but they are supposed to pay what is owed because that is what was filed to IRS.
Got it, that’s not what happened to us then. Our W2s appear to have at least a couple weeks’ pay added to them that we never received. Like I said though, I have to verify through our bank records, but the numbers don’t add up.
An increase in the number of deductions on your W4 withholding form increases take home pay slightly but not the gross pay. The tax owed stays the same but they withheld less money so you might owe (more) money in taxes when you file. They might do this to give the impression we get more money under a fake resident Biden.
How is it a huge hit to the economy? As was posted above, either you pay the taxes you owe throughout the year (ie more money taken from every paycheck), or you pay the taxes you owe when you file your tax return next year (ie less money taken from every paycheck)? Either way, the economy does not care. People may be pissed when they file their return in 2022 because they owe money instead of getting a return, but that just means they took home more money throughout the year in 2021. 2022 first quarter GDP may not be as high as it could've been, but likely 1st, 2nd, 3rd and 4th quarter GDP of 2021 was an equal amount higher than it should've been.
TL;DR - total nothing burger to anyone who actually manages their money to any fraction of a degree.
A lot of people function paycheck to paycheck and are counting on a tax return. Hit them with an unexpected tax debt instead and they're screwed for awhile.
Sure. That's why I said it means nothing to those who are able to manage their money. You'd hope those people living paycheck to paycheck would recognize their paycheck is a couple hundred dollars higher than normal. Still don't see what effect it has on the economy. They'll either spend the money now and owe it later, or pay it now and spend it later.
There was a new w4 form for 2020. The calculation for your federal tax withholdings is completely different than in past years. It has nothing to do with any actual tax assessment for the year. Everyone should complete a new one if they haven't done so. You can request a change in withholding at any time. I am an accountant, I prepare tax returns for a living.
The change my company did had nothing to do with number of exemptions. I just checked every pay stub in 2020 and the federal and state exemptions are not changed.
When you start working for an employer, the first thing you do is fill out a tax withholding form. What you check on the form determines how much is withheld from your paycheck, these are called exemptions. Typically it's 0-3 exemptions. If you claim 0, you'll have more money withheld, which means you typically get a refund when you for your taxes. If you claim 3, you'll keep more money in your paycheck, but could end up owing money when you file your taxes.
Employers pay a payroll tax, so if you send more money to the IRS, then they have to pay a bigger portion. By increasing the exemption of employees, they can decrease their portion of the taxes coming out of your paycheck.
I don't believe it is, but there's a possibility that this is all from the payroll tax holiday, and people just forgot about it, or misinterpreted the changes. I'm not sure though.
As a former business owner, I just want to clarify that employers have to match FICA (social security) and Medicare taxes paid by employees. These are flat percentages based on gross pay. Exemptions make no difference.
However, the employer takes out withholding (determined by employee exemptions) and pays that directly to the IRS on the employee’s behalf. Jacking up exemptions puts more money in the employee’s check and the employer pays less to the IRS. But, there’s no net cash advantage to the employer. The same amount of money is paid in total; it’s just been shifted from one bucket to another.
SO. Jacking up exemptions creates no cash advantage to the employer. But it does disadvantage the employee at tax time.
Therefore, the only reason a company would purposefully increase withholding exemptions would be to completely fuck their employees.
Thank you, that's why it's only occurring from major corporations. It only fucks over the economy. Watch the stock market crash when a Huge percentage of people have to pay rather than receive. It all makes sense.
I used to do the payroll taxes for our business. The company only matches SS and Medicare, your exemptions have no bearing on that. The exemptions cover your federal income tax withheld, so if you have less fed tax to pay then they still have to pay that money to you, less exemptions, they send it to the government. Either way they have to pay it out.
Looks like my husband's employer changed his status from Married with 2 exemptions to Married with 3 exemptions beginning in February. Definitely going to check this!
Fuck me! WTF
Thank you for specifying. Much clearer.
What’s going on?
Someone said that big corps are changing their employees tax status, unbeknownst to them.
They are. They did our entire company a few months ago.
Is your company a really large one?
Mid-size IWhen we received our W-2s we were absolutely in shock! Many of us went down to speak to HR and found this was done recently without our knowledge
Can you say what you noticed? I wonder if this is liberal CEOs or HR doings?
At this point it seems to be liberal corporations. Which is almost all.
Can you explain what this means? What is a "tax status"? Is that on my W2 somewhere?
They increased the rate of pay to people to increase the amount it takes to come up with the money when it comes time for taxes that all of a sudden have to be paid instead of earned. When this all goes down - there won't be a surplus of funds ... there will be a shortage ... combined with the electric bills of the middle U.S. there will be a massive shortage of funds circulating to the positive in the U.S.
It will start a Venezuela effect.
Wait, so they said they paid more to employees than they did? What do you mean by “they increased the rate of pay?” Because my wife and I worked for the same company and both our W2s seem high on the wages. Haven’t had time to verify yet.
They've increased the amount of dependents on many people's tax returns- this increases the amount of work pay but decreases the amount of tax return pay .... it causes an employee to pay more in taxes at the end of the year.
If a person files correctly ... meaning they file the amount they are supposed to pay and not what their company said ... it will cause a huge discrepancy in what is owed ... but they are supposed to pay what is owed because that is what was filed to IRS.
Got it, that’s not what happened to us then. Our W2s appear to have at least a couple weeks’ pay added to them that we never received. Like I said though, I have to verify through our bank records, but the numbers don’t add up.
It's happening to people who work for major corporations more than any other.
An increase in the number of deductions on your W4 withholding form increases take home pay slightly but not the gross pay. The tax owed stays the same but they withheld less money so you might owe (more) money in taxes when you file. They might do this to give the impression we get more money under a fake resident Biden.
This is on your w4
Oh to like exempt status or something? That’s fucked up.
However, if everyone pays ... it's a huge hit to our econonmy. Think about Agenda 21.
How is it a huge hit to the economy? As was posted above, either you pay the taxes you owe throughout the year (ie more money taken from every paycheck), or you pay the taxes you owe when you file your tax return next year (ie less money taken from every paycheck)? Either way, the economy does not care. People may be pissed when they file their return in 2022 because they owe money instead of getting a return, but that just means they took home more money throughout the year in 2021. 2022 first quarter GDP may not be as high as it could've been, but likely 1st, 2nd, 3rd and 4th quarter GDP of 2021 was an equal amount higher than it should've been.
TL;DR - total nothing burger to anyone who actually manages their money to any fraction of a degree.
A lot of people function paycheck to paycheck and are counting on a tax return. Hit them with an unexpected tax debt instead and they're screwed for awhile.
Sure. That's why I said it means nothing to those who are able to manage their money. You'd hope those people living paycheck to paycheck would recognize their paycheck is a couple hundred dollars higher than normal. Still don't see what effect it has on the economy. They'll either spend the money now and owe it later, or pay it now and spend it later.
There was a new w4 form for 2020. The calculation for your federal tax withholdings is completely different than in past years. It has nothing to do with any actual tax assessment for the year. Everyone should complete a new one if they haven't done so. You can request a change in withholding at any time. I am an accountant, I prepare tax returns for a living.
I heard about the new w4 but thought it was only for new hires?
It basically does away with "claiming" exceptions
My company did this several months ago also. I'll have to find the document in the morning.
The change my company did had nothing to do with number of exemptions. I just checked every pay stub in 2020 and the federal and state exemptions are not changed.
But they're not supposed to do it without your signature. That is what is going on.
Explain this better to non Americans please ?
When you start working for an employer, the first thing you do is fill out a tax withholding form. What you check on the form determines how much is withheld from your paycheck, these are called exemptions. Typically it's 0-3 exemptions. If you claim 0, you'll have more money withheld, which means you typically get a refund when you for your taxes. If you claim 3, you'll keep more money in your paycheck, but could end up owing money when you file your taxes.
Employers pay a payroll tax, so if you send more money to the IRS, then they have to pay a bigger portion. By increasing the exemption of employees, they can decrease their portion of the taxes coming out of your paycheck.
How can it be legal to change a person's Tax forms? That can't be legal.
I don't believe it is, but there's a possibility that this is all from the payroll tax holiday, and people just forgot about it, or misinterpreted the changes. I'm not sure though.
As a former business owner, I just want to clarify that employers have to match FICA (social security) and Medicare taxes paid by employees. These are flat percentages based on gross pay. Exemptions make no difference.
However, the employer takes out withholding (determined by employee exemptions) and pays that directly to the IRS on the employee’s behalf. Jacking up exemptions puts more money in the employee’s check and the employer pays less to the IRS. But, there’s no net cash advantage to the employer. The same amount of money is paid in total; it’s just been shifted from one bucket to another.
SO. Jacking up exemptions creates no cash advantage to the employer. But it does disadvantage the employee at tax time.
Therefore, the only reason a company would purposefully increase withholding exemptions would be to completely fuck their employees.
Thank you, that's why it's only occurring from major corporations. It only fucks over the economy. Watch the stock market crash when a Huge percentage of people have to pay rather than receive. It all makes sense.
I used to do the payroll taxes for our business. The company only matches SS and Medicare, your exemptions have no bearing on that. The exemptions cover your federal income tax withheld, so if you have less fed tax to pay then they still have to pay that money to you, less exemptions, they send it to the government. Either way they have to pay it out.
They didn't take out as much for taxes. People just spent a little more all year and will get a huge tax bill they can't pay.
can you link me to the post ??