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Author: RoseSmeller One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121599  
Subject: Extra witholding Date: 8/5/2001 4:26 PM
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On the W-4 withholding form, what exactly is the meaning of additional amount from "each paycheck"?

To avoid under withholding, I calculate the total amount I want withheld for the year, subtract the amount that the standard withholding will take, divide the remainder by the number of pay periods left in the year, and enter that on the W-4 form.

That always worked with previous employers who withheld the extra amount only from regular paychecks, not any miscellaneous payments.

A current employer, though, tries to take out that extra amount from every check they send including little ones for ESOP dividends, etc. This results in more withholding that I wanted. And since I don't know in advance the number and amount of these miscellaneous checks, I can't just adjust my calculation to allow for them.

Is this something that is at the employer's option, or is there a "right" way to do it? And if the right way is regular paychecks only, could someone point me to an official source of this info to send to the payroll department?

Thanks.
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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53163 of 121599
Subject: Re: Extra witholding Date: 8/7/2001 4:44 PM
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That always worked with previous employers who withheld the extra amount only from regular paychecks, not any miscellaneous payments.

A current employer, though, tries to take out that extra amount from every check they send including little ones for ESOP dividends, etc. This results in more withholding that I wanted. And since I don't know in advance the number and amount of these miscellaneous checks, I can't just adjust my calculation to allow for them.


Since other employers had no problem complying with your instructions, I'm inclined to think this is a procedural glitch with your current company's payroll process. It could be that the payroll process is so automated that it would require a manual manipulation that your payroll dept just doesn't want to do.

We've had a similar experience with my spouse's pre-tax withholding for his 401(k) contributions. Instead of taking it out of just his base salary paychecks, which would give him even deposits all year long, they insist on taking it out of all commission checks too, which means he's often maxed out his contributions before September. So much for trying to dollar-cost-average into a 401(k) over a 12-month period! His requests to deduct only from regular salary have fallen on deaf ears, so I wish you better luck talking to your employer.

TMF Jeanie


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