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  • Heidi Lancaster

Uncle Sam and his “Season of the Tax”

No it’s not a new Super Hero movie or a chick flick romantic comedy, where a flanneled lumberjack type person meets and completely does not match the city-dweller escaping the rat race of the city and they instantly hate each other only to find true love when they become trapped on a row boat on Lake Wannamakemomonee. Oh sorry, I digress (got caught up in my Hallmark movie obsession). It can be more like a bad horror movie if your employees are not prepared and educated.


The light side of Tax Season to me is more like an old Monty Python skit, “AND now for something completely different." Tax season and tax tables have changed quite a bit these last 2 years and I am very sure your employees have been wanting you to give them your wise-sage advice and tell them how to fill out the new 2020 Federal W4. <Insert eye roll>


This complex world of payroll taxes, depositing taxes, and filing our annual tax return has become as clear as common core math. (Thank goodness that trend is starting to disappear.)


Honestly, the new form is just a new visual. They break down your exemptions in a more clear and accurate manner. Page 4 tax tables are extremely easy to figure out once we are breathing and not cursing, “why why do things have to change.” But I come from a generation where it looks like a times table I used in grammar school. After I did my own personal analysis, I found that what I had been doing in the past was spot in. But I realize that not everyone will find the table easy to understand.


So the best offense is a defense; educate yourself, go to any seminars you find. Seek out your local fellow payroll chapter members and see if they can give more transparent insight. Share, share, share! That is how an industry and careers thrive. But also become a Mentor to your employees and give them examples of how to use Page 4. Give real type examples of different single, couple, even family wage base scenario’s. There is nothing to be afraid of when examples are given.


I have learned that many of us do tax returns during the season but because we represent our Companies, the liability is too great to give tax advice. We have enough anxiety just trying to process pay checks to the best of our ability. No one wants the infamous finger pointed at them stating, “but Miss Liberty told me to fill the form out this way,” or, “she told me that was all I needed to do to my tax form."


Another helpful hint about W4 forms, whether it is Federal or State – become audit safe. All forms must be legible, no scratch outs, and no conflicting data such as too many boxes filled out. If you are lucky enough to get into a W4 audit; you are protecting the company and the employee from the dreaded sentence above where they sign; “Under penalties of perjury, I declare that this certificate, to the best of my knowledge and belief, is true, correct, and complete.”


Our chapter hosted an amazing session with our own board member Shirley Terrell, CPA, CPP. Her valuable insight and guidance was wonderful. We even had some HR folks join the session because they also field calls about employee taxes and “why” didn’t federal tax come out for a bi-weekly part-time employee who barely grosses $200.00 per pay cycle.


Here are links to the IRS website and also the tax withholding estimator:

www.irs.gov

https://apps.irs.gov/app/tax-withholding-estimator


Until next month - Be bold and have an audit-free season!


Laurice – Fox Valley President

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© 2023 for The Fox Valley Payroll Association designed by Jill Morgenthaler.

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