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Financial Planning / Tax Strategies
|Subject: Re: CA flags W4s with "too many" exemp||Date: 2/11/2006 9:28 AM|
|Author: irasmilo||Number: 83814 of 125707|
We just got this from our friendly payroll service. Here in CA, we are required to send "questionable" W4s to the Franchise Tax Board. "Questionable" is defined as one of the following:
* The employee claims more than 10 withholding exemptions
* The employee claims exemption from withholding but wages are normally more than $200 a week
* The employee makes major changes to Form W4 such as crossing out words or writing more than usual
* The employee admits that Form W-4 is false.
In the event the FTB finds no reasonable basis for the number of withholding allowances claimed, the employee may be subject to a $500 penalty.
Just as a point of info for CA residents who may be trying to figure out what they should put down on their W4s.
Fairly close to the old IRS rules. Nothing that's been discussed in this thread comes close to triggering the fine. If the seemingly large number of withholding allowances generates total withholdings that are close to the final tax liability, there's a "reasonable" basis.
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