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Different tax withholding for longer pay periods....? WTF? PhilOssiferzStone 06-30-2008
Posted by PhilOssiferzStone on June 30, 2008, 3:49 pm
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 Howdy. I'm a California tech contractor (I'm a technical writer) that
just finished up a 5-week contract through an employment agency. Long
story short: they apparently pay bi-weekly. My first check was for one
weeks' pay, and was slightly in excess of $1500. The next payment for
two weeks' pay was around $2600. Same hourly rate, same project, same
everything.

I phoned this morning to find out what was afoot and the Chinese lady
who does their payroll got all upset, insisting that 'the software do
it all.' After a 20-minute wrangle I found out my next and last
paycheck, again for two weeks, will be for another $2600. That leaves
me about $800 shy of where I thought I'd be.

Is Federal or CA state withholding *greater* if you have a longer pay
period? Am I being dumb? Is this a wrinkle in our tax code I've simply
never run into before in 15 years as an IT contractor? Or should I
continue to make a bit of a fuss if I want my money now, as opposed to
an end-of-tax-year refund?

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Posted by Phil Marti on June 30, 2008, 4:12 pm
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> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.
>
> I phoned this morning to find out what was afoot and the Chinese lady
> who does their payroll got all upset, insisting that 'the software do
> it all.' After a 20-minute wrangle I found out my next and last
> paycheck, again for two weeks, will be for another $2600. That leaves
> me about $800 shy of where I thought I'd be.

You may also be shy of where you need to be with CA and the IRS.

Withholding tables assume that your income is steady throughout the year.
Thus, when withholding was calculated for your first paycheck, it was
calculated as if you would gross that amount every 2 weeks throughout the
year. IOW, withholding was based on an annual income half of what it really
is.

You should stash some cash where you can find it April 15, because you may
wind up with a balance due. Estimate this amount by subtracting the amount
withheld for income tax from the smaller paycheck from the amount withheld
from one larger paycheck, then divide by 2.

It works the same with payroll clerks without accents.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Alan on June 30, 2008, 4:13 pm
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PhilOssiferzStone@gmail.com wrote:
> Howdy. I'm a California tech contractor (I'm a technical writer) that
> just finished up a 5-week contract through an employment agency. Long
> story short: they apparently pay bi-weekly. My first check was for one
> weeks' pay, and was slightly in excess of $1500. The next payment for
> two weeks' pay was around $2600. Same hourly rate, same project, same
> everything.
>
> I phoned this morning to find out what was afoot and the Chinese lady
> who does their payroll got all upset, insisting that 'the software do
> it all.' After a 20-minute wrangle I found out my next and last
> paycheck, again for two weeks, will be for another $2600. That leaves
> me about $800 shy of where I thought I'd be.
>
> Is Federal or CA state withholding *greater* if you have a longer pay
> period? Am I being dumb? Is this a wrinkle in our tax code I've simply
> never run into before in 15 years as an IT contractor? Or should I
> continue to make a bit of a fuss if I want my money now, as opposed to
> an end-of-tax-year refund?
>
There is no tax withholding for non-employees.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Harlan Lunsford on June 30, 2008, 6:03 pm
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Alan wrote:
> There is no tax withholding for non-employees.
>

But OP said he worked for an employment agency, not for the company
who contracted with that agency.
Therefore, the employment agency's responsibility is to treat him
as an employee and withhold accordingly.

I hope the OP will respond and tell us if taxes were indeed withheld.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Alan on June 30, 2008, 6:50 pm
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Harlan Lunsford wrote:
> Alan wrote:
>> There is no tax withholding for non-employees.
>>
>
> But OP said he worked for an employment agency, not for the company
> who contracted with that agency.
> Therefore, the employment agency's responsibility is to treat him
> as an employee and withhold accordingly.
>
> I hope the OP will respond and tell us if taxes were indeed withheld.
>
> ChEAr$,
> Harlan Lunsford, EA n LA
>
You may be correct. I just assumed that "through an employment
agency" meant that was how he obtained the contract. It is quite
possible that he is an employee of the agency and subject to
withholding.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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