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How Tax Withholding Works
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I found the article below in a recent edition of Women's Day magazine. The woman smiling like a Cheshire cat as if she got one over on the whole world is evidently NOT stupid. Unless one can be a dental technician and be very stupid.
Cause using the federal government as a bank is so ….eh….NOT smart.
Allow me, a payroll person of very many years, to explain how tax withholding works.
You make a certain amount of money every year. Average salary for an American is around $50K a year. When a payroll is run the system, no matter how great the cost or the bells and whistles, has no way of knowing what you will make the year the payroll is processed. The payroll system DOES know how much you made that particular pay period as it is processing it currently.
All payroll systems take the amount of money being given, gross payroll, then deducts all legitimate deductions that are not subject to federal tax. So if a bi-weekly gross payroll equals $2,000 with all non-taxable 401(k)'s and the like deducted, the payroll system then multiplies $2,000 times 26 as there are 26 bi-weekly pay periods in a year. The system then calculates what the ANNUAL tax would be on this number. 26 times 2 =$52,000, so the payroll system assumes, based on the current bi-weekly number being processed, that the employee will pay whatever the tax rate % is in federal taxes. An annual salary of $52K would be about a 15% federal tax rate. Most payroll systems calculate some kind of standard deduction to reduce the annual salary for its federal tax calculations and will also deduct the current deductible amount for a dependent. So that 53K annualized by the payroll system might be further reduced by, say, $2400 for each dependent the employee "claims" on its payroll taxes per the company records.
After all this the payroll system calculates what the employees annual federal tax will be, then the system will divide that number by 26 to bring it down to a bi-weekly withholding amount.
This system allows payroll systems to automatically adjust when tax rates change, to adjust to the new percentages with only one payroll period.
Like this fine dental hygienist, an employee can claim LESS deductions than he or she really has. The payroll system will only reduce the amount subject to federal tax calculation by however many deducts the employee CLAIMS via the w-4. It doesn't have to be the ACTUAL amount of children the employee has.
At year end, the employee files their tax return. The company deducted federal tax from every paycheck as delineated above. When the employee files the tax return, now's the time to be very accurate. You got three kids, then you claim them. And IF the payroll department has been calculating and deducting for federal tax for, say, NO deductions, then the actual federal tax return will probably reflect a tax due of waaaaay less than what was actually withheld.
Thus….a tax refunds.
Hey, look….Tax refunds are nice. But this dental hygienist could have, just throwing it out there, claimed the correct amount of exemptions, ie what she will claim on her year end actual federal return. The leftover money which will then be reflected in her net pay could be, just throwing it out there, deposited into...say, a credit union, or a bank-a place where she will earn interest and have the funds available to her all year. There's all kinds of ways to automate this sort of thing so that the employee doesn't get their hot little hands on the money. If the paycheck is direct deposited, banks will make automatic deducts to savings accounts.
This way, at year end, this dental hygienist will not have to wait for her tax refund to get at that which is, in reality, HER money that the federal gubmint has been holding interest free all year.
Obama thanks this fine lady as he has voters to give free stuff and interest free loans make him happy.
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What's Going On With Hillary?
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So okay, this is a woman known for never telling the truth. Either she found long-last billing records in her closet, or she doesn't recall, or how about when Monica came upon the scene and she went on the Today show and told Matt and Katie something about frogs sitting on fence posts, meaning that there was no Monica in our White House performing oral ministrations, we are imagining things.
Goodness knows I was born at night, but not LAST night. So I don't buy for one minute that she was ignorant as to the situation in Benghazi.
Still, dear Lord, this woman had a blood clot in her brain! Further she suffered a concussion so bad she blacked out and moving on, she also fractured her skull.
I put that picture up of Hillary, not just because she looks bad in it. This is nothing new. Hillary's looked bad for a couple of years now. It's no mind that she told Baba Wawa that she does not have courtesans to pamper her, go on. She's the United States Secretary of State for God's sake. If the woman needs a courtesan to fly with her, she's got one. She's charged with meeting with diplomats across the planet, and also attends parties, soirees and dedications. Come on, she can have a team of hairdressers and personal wardrobe assistants. If the gubmint don't provide such a thing, for sure Hillary can afford it.
Which makes me think, maybe she has cancer or something. Maybe she has cancer and doesn't want the world to know.
Or maybe she has something very serious.
Cause she gets a bad virus, ends up with a concussion and now has a blood clot between her ear and her brain?
I wonder.
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Life on a Kindle
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I always used to say, like the Rube that I was, that nothing will ever replace a book in my hand, a book that has heft, a book I can read at the beach and in the tub and that I can always carry with me.
Folks, if you don't have a Kindle, or even a Nook, or an I Pad or any sort of tablet, it's time.
My library has the ability to download books on a Kindle. BUT, for $5.99 I got a book by Ann Rule, published in November 2012. When I figure the cost of going to library to select book, trip to return books, and I probably wouldn't find a recently published Ann Rule at any rate, By having it on my Kindle, I can highlight text for a review I always write, I can bookmark pages, and I can take a picture of any screen on the Kindle which I then email to myself. At that point I put it on another computer if I want or I can copy files from computer to Kindle via USB port.
Of course a lot of the joy of having a Kindle requires a WI-FI hookup. This is no problem at home for me, of course, but do not despair. It planning a dinner at a local eatery with no WI-FI, just make sure your book is already on your Kindle or is copied from the Kindle cloud to the device.
I also have five magazine subscriptions, billed and paid authomatically and delivered directly to my Kindle. These magazines are half the cost of what I paid for them in the grocery store.
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Ending With a Smile
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