2009, 2010 Federal Tax Withholding Info & Calculator
Paycheck Withholding
You may think we pay our taxes by April 15 but, this is not true. A little bit of what we owe is taken out of every check we get. What we pay in April is the difference between what we have already paid and the total amount we owe. A withholding tax is taken out of a salary, wage income, tips earned, pensions, retirement distributions and certain gambling winnings. Withholding is also taken out of interest and dividends earned.
Income Taxes Withheld on Wages
The amount of tax withheld from your wages depends on your marital status and how many dependents you claim. You have to file Form W-4 with your employer. If you do not do this, they assume you are a single person with no dependents.
Form W-2
Your employer must give you duplicate copies of your 2008 W-2 form by January 31, 2009. This is a statement of all of the wages you have earned for that year, the withheld income and the Social Security tax. If you no longer work at your place of employment before the year ends then, you may ask your employer with a written request within 30 days of leaving the job for your W-2 form.
Withholding Should Cover Your Estimated Tax
By filling out a W-4 form with your employer, you can adjust your withholding tax. The number of allowances you claim will either increase or decrease the amount of taxes being taken out of your check. On your W-4 you may also claim other allowances like the child tax credit and many others.
Are You Withholding Too Much or Too Little?
If you have to pay a large tax at the end of the year, you had too little held. If you are getting a large tax refund, you had too much held. If you are not expecting a tax refund, you may want to pay more each quarter to avoid paying so much at the end of the year.
Paycheck Tax Withholding Calculator
This valuable tool looks at your entire tax situation, including your other income and expenses, and figures out what you’ll actually owe on your taxes for the year. The calculator then determines how much you should have withheld to cover what you’ll owe for the year, without giving Uncle Sam a big loan.
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