Income Withholding

Question: i am teaching english in hungary how do i get them to stop withholding income tax? I heard from the IRS office and Frankfurt and a bureaucratic office here in Hungary that as an American citizen teaching in Hungary for less than two years I am exempt from income taxes. But the school I am teaching at has been withholding tax money out of ignorance of this law and I can't figure out how to go about getting the money (a pretty large percentage) back and how to prevent them from doing it in the future. A lawyer is too expensive, please help me figure out what to do. Edit: Yes, I am talking about Hungarian taxes. The tax treaty between the US stipulates this exemption from income tax for a teachers who work in one of the contracting parties for less than 2 years. It's not an especially well-known stipulation but it is there and as I said affirmed to me by people in trustworthy positions, but as far as local bureaucrats go it's not that well-known, probably mostly because they don't have to deal with American people teaching in their districts everyday. My yearly salary is actually under the $8,500 cut-off so I think that actually means I don't even need to file a US tax return, but currently just under 40% of my income is withheld from me a month by the Hungarian government, a certain percentage is pension and health insurance which I am not exempt from but another percentage of it is income tax which I am definitely exempt from, and I want to stop losing almost half my income to taxes every month.

Answer: What taxes are you talking about? If you're talking about US taxes, that's not necessarily true. You may be able to exclude your foreign earned income from US taxes if you meet certain conditions and file a timely return but you can't claim any carte-blanche tax exempt status on the withholding end. You must file a timely return and attach Form 2555 to your return to claim the exemption. If you can exclude the income from US taxes, you'll get a refund of any US taxes withheld. If you're talking about Hungarian taxes, you'll have to contact the Hungarian tax authorities. You'll probably have to file a Hungarian tax return to have those refunded by the Hungarian tax authorities. Addendum: Here's a link to the explanatory text of the treaty: http://www.irs.gov/pub/irs-utl/hungarytrweb.pdf and a link to the formal treaty itself: http://www.irs.gov/pub/irs-trty/hungary.pdf If the school is unwilling to stop withholding the tax, you'll have to take your case to the Hungarian tax authorities. It may be that you have to file an income tax return with them and reference the treaty in your claim for exemption from Hungarian taxes in order to have those taxes refunded to you.

Question: How to do weekly Federal Income Tax withholding for single 2009? I have the 2009 Federal withholding tax table for single. I divided it by 52 to get weekly table. I want to figure out my weekly pay roll Federal Income Tax. Marital Status: Single Taxable income: $992.42 Federal Income Tax on pay check was: $154.69 I can not get the same number. I got $157.24. Does anyone know where did I missed?

Answer: go to www.paycheckcity.com and plug in your info there

Question: Why is my income tax withholding so high? My income tax withholding seems high, and I wonder if something is wrong. I get paid monthly, and the taxable income on my last paycheck was 2467 (after mandatory public employees retirement contribution). From this FWT of 512 and 241 SWT were withheld. I am single and independent, but I claim 4 allowances on my W4 since I found I was overtaxed in the past. My income generally falls in the low 20s each year. Do these numbers seem unusual? If so, why? Is there remedy?

Answer: I haven't actually looked at the tables, but $2467 a month is about $30000 a year. Tax on that is (very roughly) $4100 not counting your standard deduction and exemption. Counting a standard deduction and exemption (claiming 2 on your W-4), reduces that by about $1300. Yes it sounds like too much being withheld. The remedy is to talk to payroll. Are you sure that is the actual taxable amount?

Question: I am getting my first paycheck as an independent contractor.What should I do about fed income tax withholding? I am in Calfornia and am working in a Calif. company. I ask because I am not considered an employee of that co., but am an independent contractor (e.g. doing free lance work). Since I am not an employee, the employer will issue me a check without withholding anything for state or fed income tax. What kind of withholding do I need to do for fed. income tax? Which form(s) should I use? Thanks.

Answer: Not only will you have to pay your own federal and state withholding, you will have to pay your own social security and medicare taxes. You will have to make quarterly payments to the IRS and the state of California. Also as an employee, you pay half of your social security and medicare tax and your employer pays the other half. Being self-employed, you pay both halves. You also then get to deduct your expenses in doing your job. Your tax preparer should go over what is allowed. In total expect to save around 30% of your pay for all of the taxes.

Question: are company's required to list name of employee they are withholding income tax and FICA tax? are company's required to list name of employee they are withholding income and FICA tax for even though they are paying the required tax to the GOV "paying under the table"

Answer: They report the names and social security numbers of the people they withheld tax from, and the amounts withheld, at the end of the year. The employees get a W-2 with the same info. When they are paying in throughout the year, they just report the total amounts withheld and therefore paid in.

Question: how to increase State Income Tax Withholding in massachusetts? I would like to increase my state tax withholding from 1 to 2 - what form do I need to fill out & submit to my employer?

Answer: The Massachusetts state income tax witholding form is Form M-4, similar in function to the federal W-4.

Question: Help filling out an Income Withholding Support Form for child support? My ex and I agreed to have the child support changed. I am filling out the form but want to make sure they don't change the support amount until after JULY 1st. How do I specify this on the form to make sure they dont change the amount before then? The instructions don't help in that area. It currently gets deducted from his paycheck through the child support agency. (CA state)

Answer: You can't do that. An income withholding is an order, you cannot put conditions on that order. You either wait until July 1 to implement the IWO or you do it now, but you can't put a time provision on it.

Question: in missouri, how long can child support enforcement hold a payment that was made by withholding income taxes? my exhusband had his income tax money withheld by the state becasue he owes back child support. It shows in case file that the child support division has recieved payment but they have yet to disburse payment to me. It has been almost 3 weeks since they have had it. How long does this process typically take. I can't seem to get a straight answer from anyone.

Answer: Depends if he owes them money or just you. If you have received money from the state, he owes that to the state and they get theirs first.

Question: Why is my federal income tax withholding higher in 2010? I am in 25% tax bracket, single head of household, and did not change my withholding status. Why is the Fed taking out about $9 more each paycheck?

Answer: Last year the decreased withholding for the Making Work Pay credit was just spread across a little less than 9 months, this year it's spread across the whole year.

Question: Should I change my income tax withholding when my baby is born? She's due this September. What are the advantages/disadvantages to each option? Thanks!

Answer: It really doesnt matter if you change it at all. The thing is- 1. When you list dependants, less money is withheld from your paycheck, but you'll owe money (or have a much lower return) at the end of the year. 2. When you list 0 dependants, which I highly suggest, more money is withheld from your paycheck but you will get a higher tax return at the end of the year. Its up to you!

Question: Anyone know where I can get a income tax withholding calculator? I think my employer is taking the wrong amount of taxes out of my paycheck. How can I figure out how much she should be taking out of each paycheck? I make $650 a week and claim 2. Thanks, you guys are awesome!!!!

Answer: Sue, Here you go. http://www.breedlove-online.com/

Question: How to calculate income considering ONLY filing status & withholding allowances? Is there an easy way to do this? I have Gross Income for 2006, 2007, 2008, 2009 and would like to calculate my 'Net Income'. Net Income in this scenario would = Gross Income Minus ONLY my withholding allowances and filing Married. Thank you in advance...

Answer: there are a number of "paycheck" calculators (free) on the internet that you can use. They allow you to select the year (and state you live in to factor in state tax too), your gross pay & withholding allowances and then calcuate the net pay for you. Once such site is PayCheckCity: here's a link to their paycheck calcuator http://www.paycheckcity.com/netpaycalc/netpaycalculator.asp I'm sure if you google "paycheck calculators" you can find a ton of other ones too.

Question: I GOT my W-2 and in the federal income tax withholding box its empty?? HELP!!!? I just GOT my W-2's and in the federal income tax withholding box its empty ... what does that mean ? the state tax is filled in and everything ... my pay stubs say the same thing ... does that mean i owe them or what? i only made about 8,000 the whole year because i only worked about 4 months in 2009 ... can that be why the federal income part is empty , and will i have to pay them money back ?

Answer: That means you didn't pay attention to your paychecks during the year. No federal income tax was withheld. Not all is lost. If you are not being declared as a dependent of somebody else such as your parents, and you are single, you don't pay federal taxes unless your income exceeds $9,350 in 2009. You may also be eligible for one or more tax credits that will cover your tax liability or generate a refund. I hope this helps. Gary

Question: who can claim exemption from income tax withholding? I am a student with a work-study job and my parents claim me as a dependent on their tax form, will I be able to claim exemptionfrom having income tax withheld. Also do I have to file a 1040 (I am making under $8000/yr from this job)

Answer: Yes, you have to file. As your parents are claiming you, you probably won't get everything back.

Question: Who is not defined as an employee under the federal income tax withholding law?

Answer: Usually if you do not receive a W2 form they you are treated as an Independent Contractor. You would probably get a 1099 instead.

Question: What are Floridas requirements for deposit and reporting of payroll income tax withholding?

Answer: Florida doesn't have a state income tax so there would be no withholding to worry about. You would just have to worry about the federal income taxes.

Question: How many is the maximum number of exemptions one can deduct from Income Tax withholding?

Answer: Sky's the limit but expect questions if you start getting real high.

Question: What does this mean: "you are claiming exemption from income tax withholding"? what does exemption mean?

Answer: It means that you do not want any tax withheld from your paycheck. If you earn, say, $100/week, your company may pay you $80, which is your "take home" pay. That $20 they "withheld" comprises federal and state taxes, and social security payments. (If you claim exemption from withholding and still end up owing tax at the end of the year, you'll still have to pay it)

Question: Is it illegal in NYC for an employer to neglect withholding Federal & tax income tax? I have worked at my job in NYC for two years. The first year I owed $900 in income tax. I then requested to have my filing status changed to single-0. Our bookkeeper told me he did it and I accepted his word. Then this year, surprise… surprise, I owed $4,000. After some inquires, I found out that my bookkeeper was not withholding federal or state tax from my commission checks. So, to sum up: I was filled at single-1, I had a very low salary and therefore had a low tax bracket. I was paying taxes for that tax bracket. He never took federal or state tax from my commission checks, which put me in a much higher tax bracket…. Therefore I owed a huge amount of money. I tried to get him to change 1) my filing status and 2) add tax on my commission. He got defensive and started yelling. Nothing was changed. Eventually I went to my boss and asked him to speak with the bookkeeper. My request was ignored. Nothing changed. I kept pushing… talking to the bookkeeper, payroll and my bosses. I was to

Answer: Depending on what your job is, you might be considered an independent contractor, and that's why they aren't taking out taxes. Sometimes employers call people "independent" and issue 1099's when their job duties are really those of an employee, but it's very possible to legitimately be classified that way depending on your job. And your mention of commissions makes it possible although not for sure that you could be an independent contractor. Is the person you're doing the work for taking out social security and medicare? If they are, then they do NOT have you classfied as independent, and should be taking out income tax also as directed by the W-4 you file with them. What form did you get from them at the end of last year showing your income? A W-2 is given to an employee, a 1099-misc is given to an independent contractor and shows the income as "non-employee compensation". If you got a 1099, read this to see if your job seems to really fit that definition: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Question: How does the 2009 "Federal income tax withholding" tables reconcile to the "Federal Income tax" tables? I am just curious, and was trying to figure out specifically why the amount withheld for married individuals on an annual basis is $0 for wages (after subtracting allowances) not over $15750.

Answer: The married tables assume a non working spouse, so you'd have 2 exemptions and a double std deduction.