__________ is/are overrated.

[kphoger]

Oh, I assumed people just changed their withholding back to what they wanted it to be, and left it at that–not that they tried to square everything up that went sideways in the meantime.  Yeah, I'm sure that was quite an ordeal.

[wanderer2575]

You like doing your taxes?

I did this year. We installed solar so we got $6k back.

I had to pay a bunch this year because the idiots in payroll at my wife's job thought they only needed to withhold $39 in taxes for the whole year. That was an unpleasant surprise.

As a payroll professional I have to ask:  Was it an error on the employer's part, or did they withhold correctly based on your wife's Form W-4?  And did your wife review her pay statements during the year and attempt to make a change in withholding?  If the answers are the latter and no, respectively, then your wife and you are the idiots.  I have heard from a LOT of people underwithheld because they didn't understand how the new W-4 (introduced in 2020) works, but that's not Payroll's fault.

[Rothman]

Oh, I assumed people just changed their withholding back to what they wanted it to be, and left it at that–not that they tried to square everything up that went sideways in the meantime.  Yeah, I'm sure that was quite an ordeal.

Just changing the withholding back wouldn't be an acceptable solution since the payroll would still be noncompliant with employees W-4s.  People tell companies how much they want withheld.  Holding more in one paycheck means holding less in future ones to make up the difference and ensure the employees' loan to the federal government isn't larger than intended.

[kkt]

I have to hand it to my former employer.  33 years and correct paychecks, on time, twice a month, every time.

Just switching to a new payroll system shouldn't require new W-4s to be filed.

[jeffandnicole]

I don't remember what company I was with when this happened. But one year they revised payroll systems and everyone was switched to "Single, No Dependents". Lots of people suddenly had much more withheld, and those that lived paycheck to paycheck were screaming.

At least that's something that can be fixed within a couple of pay-periods.  Scott's wife, on the other hand, apparently didn't notice anything was amiss for a whole year (or whatever portion she worked there) and got socked with a much bigger surprise.

But wouldn't someone suddenly getting more net take-home pay take, at a very minimum, a cursory review of their pay stub to see what changed? It's hard to say nothing was amiss when "I got a surprise raise I wasn't expecting" would be the amiss.

The whole purpose of the pay stub is to help avoid surprises like these.

[wanderer2575]

I don't remember what company I was with when this happened. But one year they revised payroll systems and everyone was switched to "Single, No Dependents". Lots of people suddenly had much more withheld, and those that lived paycheck to paycheck were screaming.

At least that's something that can be fixed within a couple of pay-periods.  Scott's wife, on the other hand, apparently didn't notice anything was amiss for a whole year (or whatever portion she worked there) and got socked with a much bigger surprise.

But wouldn't someone suddenly getting more net take-home pay take, at a very minimum, a cursory review of their pay stub to see what changed? It's hard to say nothing was amiss when "I got a surprise raise I wasn't expecting" would be the amiss.

The whole purpose of the pay stub is to help avoid surprises like these.

Review a pay statement?  But that would take away from TikTok and selfie time!  /s

I think this is the one detrimental aspect of electronic pay (direct deposit and paycards).  When there's a paper paycheck the statement is attached whether or not you want it, so there is at least a fighting chance the employee will look at it.  Electronic pay is passive and my experience with statements is that a lot of people don't pick them up (if paper) or go online to view them.  They just know some money goes into their bank accounts every payday and that's all that matters.  At my previous employer, where there was no employee self-service system, I was constantly flooded with requests for reprints of the past X number of pay statements RIGHT NOW for loans/financial assistance/renters/mortgages/etc. because those were the only times people cared about them.

Besides just seeing the gross-to-net, you need to review whether the tax withholding is appropriate for your situation.  An employer changing everyone to Single-0 in a system conversion is wrong.  An employer requiring all new Forms W-4 for a system conversion is wrong.  But if the employer is correctly withholding per the W-4, and it's not enough and you end up owing a boatload at the end of the year, that's your fault, not the employer's.  As I noted, this has been a huge problem with the new W-4, particularly because people don't understand the effect of claiming tax credit amounts.

As for inquiring into the issue of more take-home pay, the other likely possibility (after true ignorance) is the common position of "I'm not going to worry about an error in my favor" without any consideration of future consequences.

[JayhawkCO]

I don't remember what company I was with when this happened. But one year they revised payroll systems and everyone was switched to "Single, No Dependents". Lots of people suddenly had much more withheld, and those that lived paycheck to paycheck were screaming.

At least that's something that can be fixed within a couple of pay-periods.  Scott's wife, on the other hand, apparently didn't notice anything was amiss for a whole year (or whatever portion she worked there) and got socked with a much bigger surprise.

But wouldn't someone suddenly getting more net take-home pay take, at a very minimum, a cursory review of their pay stub to see what changed? It's hard to say nothing was amiss when "I got a surprise raise I wasn't expecting" would be the amiss.

The whole purpose of the pay stub is to help avoid surprises like these.

Coming from someone who, until recently, was working my salaried career job and also bartending a couple nights a week where my tips were directly deposited, unless I took the time to look at my bank statement, I wouldn't notice if I was getting paid a little more than before. At the restaurant, we wouldn't know how much the tips were until they were on our paycheck due to tip share and other goodies.

[kphoger]

I think this is the one detrimental aspect of electronic pay (direct deposit and paycards).  When there's a paper paycheck the statement is attached whether or not you want it, so there is at least a fighting chance the employee will look at it.  Electronic pay is passive and my experience with statements is that a lot of people don't pick them up (if paper) or go online to view them.  They just know some money goes into their bank accounts every payday and that's all that matters.  At my previous employer, where there was no employee self-service system, I was constantly flooded with requests for reprints of the past X number of pay statements RIGHT NOW for loans/financial assistance/renters/mortgages/etc. because those were the only times people cared about them.

Besides just seeing the gross-to-net, you need to review whether the tax withholding is appropriate for your situation.  An employer changing everyone to Single-0 in a system conversion is wrong.  An employer requiring all new Forms W-4 for a system conversion is wrong.  But if the employer is correctly withholding per the W-4, and it's not enough and you end up owing a boatload at the end of the year, that's your fault, not the employer's.  As I noted, this has been a huge problem with the new W-4, particularly because people don't understand the effect of claiming tax credit amounts.

As for inquiring into the issue of more take-home pay, the other likely possibility (after true ignorance) is the common position of "I'm not going to worry about an error in my favor" without any consideration of future consequences.

Your electronic copies can also go bye-bye.  When we switched payroll companies this past year, we gave everyone notice to find and save any documents they might need, because at a certain point we would lose access to that data.  One guy apparently didn't get the message or didn't care, except that he later realized he needed copies of his documents from like three years earlier because he still hadn't paid his taxes for that year.  SOL, bud...

[JayhawkCO]

I think this is the one detrimental aspect of electronic pay (direct deposit and paycards).  When there's a paper paycheck the statement is attached whether or not you want it, so there is at least a fighting chance the employee will look at it.  Electronic pay is passive and my experience with statements is that a lot of people don't pick them up (if paper) or go online to view them.  They just know some money goes into their bank accounts every payday and that's all that matters.  At my previous employer, where there was no employee self-service system, I was constantly flooded with requests for reprints of the past X number of pay statements RIGHT NOW for loans/financial assistance/renters/mortgages/etc. because those were the only times people cared about them.

Besides just seeing the gross-to-net, you need to review whether the tax withholding is appropriate for your situation.  An employer changing everyone to Single-0 in a system conversion is wrong.  An employer requiring all new Forms W-4 for a system conversion is wrong.  But if the employer is correctly withholding per the W-4, and it's not enough and you end up owing a boatload at the end of the year, that's your fault, not the employer's.  As I noted, this has been a huge problem with the new W-4, particularly because people don't understand the effect of claiming tax credit amounts.

As for inquiring into the issue of more take-home pay, the other likely possibility (after true ignorance) is the common position of "I'm not going to worry about an error in my favor" without any consideration of future consequences.

Your electronic copies can also go bye-bye.  When we switched payroll companies this past year, we gave everyone notice to find and save any documents they might need, because at a certain point we would lose access to that data.  One guy apparently didn't get the message or didn't care, except that he later realized he needed copies of his documents from like three years earlier because he still hadn't paid his taxes for that year.  SOL, bud...

I had an issue where my current employer needed 10 years of W2s for some ungodly reason during my background check. I reached out to a former employer, and they had switched payroll companies after I had left and it was a mess trying to track that stuff down.

[J N Winkler]

Your electronic copies can also go bye-bye.  When we switched payroll companies this past year, we gave everyone notice to find and save any documents they might need, because at a certain point we would lose access to that data.  One guy apparently didn't get the message or didn't care, except that he later realized he needed copies of his documents from like three years earlier because he still hadn't paid his taxes for that year.  SOL, bud...

It really bothers me that financial institutions that dangle the availability of statements in PDF do not keep them accessible in perpetuity.

In a similar vein, when I have to sign paper documents that carry legal weight, I usually try to take at least a camera copy so that the entity asking me to sign is not the only party with a copy.

[Scott5114]

You like doing your taxes?

I did this year. We installed solar so we got $6k back.

I had to pay a bunch this year because the idiots in payroll at my wife's job thought they only needed to withhold $39 in taxes for the whole year. That was an unpleasant surprise.

As a payroll professional I have to ask:  Was it an error on the employer's part, or did they withhold correctly based on your wife's Form W-4?  And did your wife review her pay statements during the year and attempt to make a change in withholding?  If the answers are the latter and no, respectively, then your wife and you are the idiots.  I have heard from a LOT of people underwithheld because they didn't understand how the new W-4 (introduced in 2020) works, but that's not Payroll's fault.

My CPA was of the opinion that the error was on payroll's end.

[wanderer2575]

You like doing your taxes?

I did this year. We installed solar so we got $6k back.

I had to pay a bunch this year because the idiots in payroll at my wife's job thought they only needed to withhold $39 in taxes for the whole year. That was an unpleasant surprise.

As a payroll professional I have to ask:  Was it an error on the employer's part, or did they withhold correctly based on your wife's Form W-4?  And did your wife review her pay statements during the year and attempt to make a change in withholding?  If the answers are the latter and no, respectively, then your wife and you are the idiots.  I have heard from a LOT of people underwithheld because they didn't understand how the new W-4 (introduced in 2020) works, but that's not Payroll's fault.

My CPA was of the opinion that the error was on payroll's end.

If that's the case (and that's a big "if," but that's for another discussion), bad on them.  But ultimately you're responsible for the tax, whether it's withheld or you pay it out of pocket, so you need to keep an eye on it during the year.  A roadgeek analogy is defensive driving.  If you're in a crash, does it fully matter that the other driver is at fault?  You still have to deal with your car being wrecked.

[1995hoo]

If that's the case (and that's a big "if," but that's for another discussion), bad on them.  But ultimately you're responsible for the tax, whether it's withheld or you pay it out of pocket, so you need to keep an eye on it during the year.  A roadgeek analogy is defensive driving.  If you're in a crash, does it fully matter that the other driver is at fault?  You still have to deal with your car being wrecked.

This sort of thing is why I download–and review–my pay stub every pay period. Errors can and do happen and when it involves something that could get you hit for tax penalties, it's better to catch it in advance.

Admittedly, I take it further than most people do; I keep a spreadsheet that tracks my gross pay every pay period plus federal and state tax withheld. In the same file I have another worksheet that does the same for my wife and a third one that tracks things like mortgage interest, medical expenses, etc. I started doing that one year when TurboTax found that we had underpaid our estimated taxes. I went through and annualized our income and deductions and significantly reduced the underpayment penalty by doing so, but it took several hours to do. Hence why I now keep a spreadsheet–if I ever have to do that again (and it seems unlikely as long as the current federal tax law is in place), the time-consuming work will already be done.

[JayhawkCO]

I think my underpayment penalty was something like $7 last year. Worth my time to not make said spreadsheet.

[Rothman]

If that's the case (and that's a big "if," but that's for another discussion), bad on them.  But ultimately you're responsible for the tax, whether it's withheld or you pay it out of pocket, so you need to keep an eye on it during the year.  A roadgeek analogy is defensive driving.  If you're in a crash, does it fully matter that the other driver is at fault?  You still have to deal with your car being wrecked.

This sort of thing is why I download–and review–my pay stub every pay period. Errors can and do happen and when it involves something that could get you hit for tax penalties, it's better to catch it in advance.

Admittedly, I take it further than most people do; I keep a spreadsheet that tracks my gross pay every pay period plus federal and state tax withheld. In the same file I have another worksheet that does the same for my wife and a third one that tracks things like mortgage interest, medical expenses, etc. I started doing that one year when TurboTax found that we had underpaid our estimated taxes. I went through and annualized our income and deductions and significantly reduced the underpayment penalty by doing so, but it took several hours to do. Hence why I now keep a spreadsheet–if I ever have to do that again (and it seems unlikely as long as the current federal tax law is in place), the time-consuming work will already be done.

O.o

All I do is try to adjust my W-4 each year to keep my refund to a minimum and my paycheck to a maximum.  Trump's change to it didn't help matters -- a "simpler" form that actually requires more background math and Heaven help you if you try to use the IRS calculator. Takes me a couple of hours to figure it out each year.

[Scott5114]

You like doing your taxes?

I did this year. We installed solar so we got $6k back.

I had to pay a bunch this year because the idiots in payroll at my wife's job thought they only needed to withhold $39 in taxes for the whole year. That was an unpleasant surprise.

As a payroll professional I have to ask:  Was it an error on the employer's part, or did they withhold correctly based on your wife's Form W-4?  And did your wife review her pay statements during the year and attempt to make a change in withholding?  If the answers are the latter and no, respectively, then your wife and you are the idiots.  I have heard from a LOT of people underwithheld because they didn't understand how the new W-4 (introduced in 2020) works, but that's not Payroll's fault.

My CPA was of the opinion that the error was on payroll's end.

If that's the case (and that's a big "if," but that's for another discussion), bad on them.  But ultimately you're responsible for the tax, whether it's withheld or you pay it out of pocket, so you need to keep an eye on it during the year.  A roadgeek analogy is defensive driving.  If you're in a crash, does it fully matter that the other driver is at fault?  You still have to deal with your car being wrecked.

My CPA didn't explain the precise place where payroll went wrong, but the way she described it, it sounded like the 3/4 error in the MUTCD–a section of regulations where if one reads the text carelessly they will think it wants them to do X when the exact wording really says to do Y. What I don't get is why nobody on their end sanity checked it and went "Hey, $39 is way the hell too low of a withholding for the amount she's making, maybe we should check that the withholding formula we're using is actually correct".

In any case my wife submitted a new W4 that directs them to add $80 to whatever their bonkers formula spits out, so we shouldn't have this problem again next year.

[NE2]

The off-topic board

[jeffandnicole]

You like doing your taxes?

I did this year. We installed solar so we got $6k back.

I had to pay a bunch this year because the idiots in payroll at my wife's job thought they only needed to withhold $39 in taxes for the whole year. That was an unpleasant surprise.

As a payroll professional I have to ask:  Was it an error on the employer's part, or did they withhold correctly based on your wife's Form W-4?  And did your wife review her pay statements during the year and attempt to make a change in withholding?  If the answers are the latter and no, respectively, then your wife and you are the idiots.  I have heard from a LOT of people underwithheld because they didn't understand how the new W-4 (introduced in 2020) works, but that's not Payroll's fault.

My CPA was of the opinion that the error was on payroll's end.

If that's the case (and that's a big "if," but that's for another discussion), bad on them.  But ultimately you're responsible for the tax, whether it's withheld or you pay it out of pocket, so you need to keep an eye on it during the year.  A roadgeek analogy is defensive driving.  If you're in a crash, does it fully matter that the other driver is at fault?  You still have to deal with your car being wrecked.

My CPA didn't explain the precise place where payroll went wrong, but the way she described it, it sounded like the 3/4 error in the MUTCD–a section of regulations where if one reads the text carelessly they will think it wants them to do X when the exact wording really says to do Y. What I don't get is why nobody on their end sanity checked it and went "Hey, $39 is way the hell too low of a withholding for the amount she's making, maybe we should check that the withholding formula we're using is actually correct".

In any case my wife submitted a new W4 that directs them to add $80 to whatever their bonkers formula spits out, so we shouldn't have this problem again next year.

Because technically, that's not payroll's job to provide legal or accounting advice.   Everyone thinks the way they would handle a certain tax situation is the 'normal' way everyone would do it, but the tax forms allow for nearly countless options.  They don't know her financial situation or desires.  They don't know what deductions you are taking out, which may be making up for the shortfall on her end.  The W-4 forms allow for a multitude of deduction options, and once someone decides on their deduction, they can choose to have more withholding taken out anyway by declaring a specific amount over and above what the deduction calls for.  People have 2nd jobs and other payment options.  They have stocks and bonds and CDs and investments they can use to pay taxes.  Maybe some people prefer minimum deductions and then pay quarterly payments.  But the point is, payroll or HR doesn't know any of that, and they can't and shouldn't even come close to asking about that.  If the employee submits a W-4 requesting a specific deduction, that's what they process.

[Rothman]

Yep, I remember in one of my first jobs, Payroll took the prohibition on giving advice for the W-4 very seriously.  Of course, it was for a law firm...

[Scott5114]

Still, you'd think it would at least make them give their own formula a once-over.

[Rothman]

Still, you'd think it would at least make them give their own formula a once-over.

I'd bet it's not their formula and they use third-party software to ensure compliance.

Therefore, they just plug in the numbers that are on people's W-4s.

[Scott5114]

Still, you'd think it would at least make them give their own formula a once-over.

I'd bet it's not their formula and they use third-party software to ensure compliance.

Therefore, they just plug in the numbers that are on people's W-4s.

I'll take the word of my CPA that they screwed it up over that of random people on a web forum saying they didn't.

(Don't really get why everyone's brown-nosing the payroll department at some random casino they don't work at...Not like you'd even want to work there anyway, so kissing up to them doesn't get you anything...)

[zachary_amaryllis]

I dont do satellite because of them being slow.
I do cable internet. Its faster.

That's because you are fortunate enough to live where there is cable internet. My family in Arkansas lives in a secluded rural area and the only kind of internet they can get is satellite. It sucks, but what are you going to do, use dialup?

Same here, but in a canyon in Colorado. Hughesnet sucks in ways I didn't think possible, but it's either dialup, or this.

[Rothman]

Still, you'd think it would at least make them give their own formula a once-over.

I'd bet it's not their formula and they use third-party software to ensure compliance.

Therefore, they just plug in the numbers that are on people's W-4s.

I'll take the word of my CPA that they screwed it up over that of random people on a web forum saying they didn't.

(Don't really get why everyone's brown-nosing the payroll department at some random casino they don't work at...Not like you'd even want to work there anyway, so kissing up to them doesn't get you anything...)

Taking the word of your CPA is overrated.

[wanderer2575]

Still, you'd think it would at least make them give their own formula a once-over.

I'd bet it's not their formula and they use third-party software to ensure compliance.

I always tested the system each year by doing some calculations by hand and comparing to what the system calculated.  Vendors are human, and mistakes can happen.  If it's wrong, my customers (the company employees) will be coming for my throat, not for the vendor's.

I'll take the word of my CPA that they screwed it up over that of random people on a web forum saying they didn't.

Again speaking as a payroll professional, I say I'll take the CPA's word when it comes to accounting and preparing tax returns.  Calculating withholding, not so much.  I've had many employees over the years come to me with "My accountant says I can ask you to..." and a withholding scheme ranging from weird to outright criminal.  The CPA is concerned only with his client's (that's you) interests, which often is trying to get withholding to be a specific amount, and also very well may include making you feel good that an unfavorable situation isn't your fault.  (Certainly I concede that without the details to look at your situation, I can't say for certain that it wasn't the employer's goof.)

TL;DR:  I don't tell accountants how to handle asset depreciation, and I don't assume they know how withholding works.