65

The CPA is mostly correct. Her use of "in kind" may be confusing, but it appears that while our gut would call this "bartering" and refer to the rules regarding same, there's a different set of rules that apply to farm workers. The following appears in IRS Pub 51 Agricultural Employer's Tax Guide - Noncash wages (including commodity wages). Noncash ...


27

This is something that many people misunderstand. Nearly everyone who works in the U.S. is required to pay Social Security and Medicare taxes (sometimes called payroll taxes or FICA). These are not a savings plan, and the money you pay is not going into an account with your name on it. This money is used to pay for the benefits of the current retirees/...


24

If your annual salary exceeded the maximum amount subject to Social Security tax for 2013 ($113,700 as per JoeTaxpayer's comment), then it is possible that the last paycheck is what put you over the limit. Thus, part of the salary on the last paycheck had Social Security tax withheld and part did not. As JoeTaxpayer points out, there is no limit on the ...


22

Is that normal? Yes. It's in fact pretty low. Just the FICA taxes you pay are ~7.5%, so you're paying ~21% for State and Federal. Pretty reasonable, especially if you live in a high-tax state (which MA is ~5.3% on all income).


20

The good news is that he probably won't be required to pay SS taxes. The bad news is that the reason will be because he can't get a job without a SSN. You don't get to just opt out of the social security system wholesale like that. However, there are some career options to avoid paying into (or getting paid out of) social security including jobs with ...


19

Yep. You're single, you're possibly still a dependent on your parent's taxes (in lieu of rent), and you're finally bringing home bacon instead of bacon bits. Welcome to the working world. Let's say your gross salary is the U.S. median of $50,000. With bi-weekly checks (26 a year; common practice) you're getting $1923.08 per paycheck. In the 2013 "Percentage ...


19

The short answer is that yes, you are responsible for making the FICA taxes whole. Note that you're not being charged anything you weren't already owing; you in fact got to have some of the money ahead of time, so you came out ahead in one sense. But technically, the portion of FICA tax that should be withheld is your responsibility to pay (and their ...


19

The money gets sent to the IRS through the EFTPS system. Depending on the amounts, the employers are required to deposit it on a monthly/semi-weekly basis, so they don't get to keep the tax money for long. Failure to deposit the payroll taxes on time is one of the most heavily penalized IRS offenses. This area of violations is called "trust fund violations"....


19

(Your situation is not unique: lots of people have part-time "sole proprietorship" side jobs.) Any revenue from your mobile app business is... income. Therefore you have to pay tax on it. Even if the business operates at an overall loss, the Schedule C is required. Schedule C to determine your profit, and Schedule SE to determine taxes.


18

Income taxes are due when the income is earned. So from each salary paid you should pay the taxes due. Re why the taxes are paid on assumption that you will keep your salary the same level - that's because that's the safest bet for most of the taxpayers. It would not be simpler doing what you suggested, especially because salary is not necessarily your only ...


18

Not getting SSN has nothing to do with his/her liability to pay SS taxes. It just makes the life more complicated and you forgo your own tax benefits that you must have child's SSN to get. To request an exemption, your child must qualify under certain conditions and file a formal request for exemption with the SSA. See here for more details.


18

Your reasoning is sound, and you are correct. What most likely happened is that they withheld as if you earned all that within one pay period. That could be someone on the payroll end not doing the calculation correctly, or not knowing how to override the default pay-period calculation, or an inflexible payroll software that doesn't allow for exceptions like ...


17

These two items (social security and taxes) should have also been withheld from any other positions you held previously. Both these items cover you in the future. Social security when you reach retirement age, or earlier if you are disabled. Medicare to serve a your health insurance when you are a senior citizen. Everybody who has wage income pays the ...


17

Social Security tax only applies to the first $118,500 you earn in a year. See the Social Security Administration's website for more info. You should see a 6.2% increase in after tax earnings now. If you switch employers mid-year, they will start withholding social security again.


13

From Socialsecurity.gov on Medicare: Medicare is our country’s health insurance program for people age 65 or older. Certain people younger than age 65 can qualify for Medicare, too, including those who have disabilities and those who have permanent kidney failure. From Socialsecurity.gov on Social Security: You can apply online for retirement ...


13

In some months there are three biweekly payments. If you multiply $3846.15 by 26 (the number of biweekly periods in the year) you get $99999.90. I wouldn't worry about the extra ten cents.


12

Yes you will get back the extra money at tax time. You are not able to adjust the withholding. Each employer will pay their share, and not get a refund, but at tax time, you'll get back any excess as if you worked one job. On the tax forms the data from each W2 is loaded, including the Social Security (FICA) withheld. There are a number of circumstances ...


12

First, please make sure that this letter from HMRC is genuine and not some kind of scam. It probably is ok, but make sure that the return address you are sending to is a genuine HMRC address, e.g. by cross-checking with the HMRC website. The work or clock number is probably just the unique reference your employer has for you and reports your payments to ...


11

This doesn't look particularly unreasonable, but a few notes: He might be somewhat over-withheld for his taxes because he's claiming 0 federal and state allowances. In other words, his employer may be taking more out for taxes than he'll actually owe. This doesn't mean the money is lost--he'll get back any difference next year when he files his tax return--,...


11

Conceptually, you should think of it like this: You issue your employee a paycheck, and your employee then turns around and purchases the amount of wheat from you which equals the entire net amount of the paycheck. You in turn report the amount you sold the wheat for as income. If you do this (and perhaps you should), then your payment to the employee is ...


10

Well it looks like you have done the math right and understand the extreme cases. Today there is nothing stopping companies from doing what you say, its just that Too complicated to compute. Too complicated for individuals to understand It's not what I like Bob makes 2000 per month, less of taxes he would make 1750 and is happy to get the same amount ...


10

You can file a revised W-4 with your employer claiming more allowances than you do now. More allowances means less Federal tax and (if applicable and likely with a separate form) less state tax. This doesn't affect social security and Medicare with holding, though. That being said, US taxes are on a pay-as-you-go system. If the IRS determines that you're ...


10

Farm income is a separate beast under Schedule F. There may be a basis for the CPA'S assertion in regards to a farm-income concept of "commodity wages" though I don't have the expertise to parse "if the substance of the transaction is a cash payment" in the quote from pub 225 below: IRS Pub. 225 Noncash wages (including commodity wages).    Noncash ...


9

The FICA payroll taxes of 15.3% (employee 6.2% + 1.45%, and employer 6.2% + 1.45%) apply to earned employment or self-employment income. That is, income you realize from working. There are many additional sources of personal income, such as: company pension plan income, Social Security retirement income, investment income (capital gains, dividends, ...


9

You seem to be very confused about taxes. The withholdings from your paychecks are just the result of a reasonably educated guess of what your total tax liability will be at the end of the year. Your actual taxes aren't actually calculated until the end of the year when you gather up all of your w2s, 1099s and other documentation and file. US Federal ...


8

Yes that is not an unusual number. In some states the state tax rate is fairly flat, and unless you are highly paid the social security and medicare taxes are also flat. The big issue is the federal number. Several things can make make the federal taxes for the early paychecks larger than normal. It is before the 401K starts. It is before the insurance ...


8

No not deductible. But - If you work more than one job, you run the risk of having too much SS withheld. Each employer doesn't know what the others pays you. Tax time reconciles this. And much thanks to Dilip for the following clarification - Not only does each employer not know what the others pays you, but even if you tell him, he will not care. He is ...


8

This is a common occurrence when somebody has multiple jobs in one year. The employer can't know if you have reached the annual limit. They know to stop when you have hit the maximum for their company, but don't have information on the other jobs. In fact the IRS doesn't let them factor in the other jobs. They have to keep making their payment until you hit ...


8

Assuming you still have all the extra money they gave you, I think the best solution would be for you to pay them back immediately. I think this makes you look the best in the eyes of your employer. Also, if instead you choose to deduct it over the next 5 paychecks, a couple of things might happen: Since the upcoming paychecks are smaller, their accounting ...


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