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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29774
Experience:  Taxes, Immigration, Labor Relations
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My name is ***** *****
, years ago I worked

Customer Question

My name is ***** *****
JA: Thanks. Can you give me any more details about your issue?
Customer: years ago I worked construction and once in a while we would file fixed 50.00 are fixed 100.00 on our W4 and this seemed to be ok with the IRS. this was only for turn around jobs not lasting more than a couple of weeks but making 6,000 are so per week . leaving the w4 at the normal deductions would kill us on our pay . In construction work this is sometimes needed to catch up. Once the ladies didn't understand and told us to file married and 99 shortly after I was contacted by the IRS and question as to why I did so . I explained what had happen
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

When we are dealing with withholding - we need to understand that the purpose of withholding to cover possible tax liability.

But withholding is NOT a tax liability.

The actual tax liability is based on total income, filing status, deductions, etc - and may only be calculated on the tax return.

Expert:  Lev replied 1 year ago.

When you have several different jobs - as often happens in construction industry - each job withholds as that is the only income - and you may have larger tax liability when the tax return is prepared.

To avoid that - you requested additional withholding - as you mentioned $50 or $100 per pay period.

You may choose to pay your own estimated taxes directly to the IRS - but additional withholding seems as easier.

I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you with all tax related issues.

Customer: replied 1 year ago.
My question was misunderstood
Expert:  Lev replied 1 year ago.

Sorry fro confusion.

In your original post - you stated some facts but there is no actual question.

Thus miscommunication possible.

Can you please post your actual question and we will continue discussion.

Customer: replied 1 year ago.
Understand I need a couple of big checks for this two week shut down. Ten years ago we would do this from time to time at the end of the year with all the write offs for travel and the long hours and heavy taxes we would get money back . This was allowed by the IRS . In the tax code book where it tells you about the number of dependent you can claim on the back of that page explained the fixed rate I just can't remember what it is. Most aren't fimiliar with it because most arent making kk6,000 a week checks . If I claimed married and 9 ok still kill me on this amount in a week . So I don't need this to happen I need as much of the gross amount as I can get for that two weeks . Then I'll change back to married and one and still be fine at the end of the year . So I need to know how I can do this again . I know you can did it for years . But the one time the girls in the office wasn't familiar with how to do this with the fixed fifty and they assured us it would be the same as claiming married and 99 . Wrong because a few weeks latter all nine guys was contacted by the IRS and we were asks why we filled W4 married and 99 . We explained that we was told it would be same as fixed . He said no that it put up a red flag when we did and going fixed was ok . Working the long hours making
.00 and taking home 1500 hundred of That is not good when you can use that money to get set up because of the extra out of town expense . it all works out at the end of the year and having only a fixed amount per week for a couple weeks whatever the amount you chose 100 are 200 hundred be held out . The Irs knew all about this and understood why we would claim the fixed amount and I never had any problems doing it as long as the ladies in the contractors office was familiar with it . Some were some were not and convincing them other wise wasn't eazy so this is why I ask . I need to know where I can find it in the tax code book so I can get a copy of it are someone that is familiar with it . I was in the Electrical Union for 18 years i use to be up on things such as this but 10'years later I have forgotten : Now due to lay offs I find myself back doing construction and this really helped a lot of guys get on their feet when they had been between jobs for a time . Any info pertaining to the tax code that allows this would be very appreciated . This is not a easy find but I do remember once the girls wasn't familiar with this so we all had a meeting to talk about it the accountant came to the room with a tax code book in hand and started telling all the guys that we could not do that and at the time I wasn't sure about it . One of the guys in our group was very up on it . He pointec out to the accountant that if she would turn the page and read from the back of it that she would understand what the fixed amount was all about . It's not that we were trying to dodge paying taxes for the year. it wax done so you get a lot more money for the two pay periods i for the two weeks and you also would no it was ok . proceeded to read the code that on the very page it talks about your allowances you can claim the fixed amount was on the very back side of it
Expert:  Lev replied 1 year ago.

Unfortunately - the IRS regulations are clear of withholding requirements

See here - page 20 - that is (Circular E), Employer's Tax Guide

Completing Form W4. The amount of any federal income tax withholding must be based on marital status and withholding allowances. Your employees may not base their withholding amounts on a fixed dollar amount or percentage. However, an employee may specify a dollar amount to be withheld in addition to the amount of withholding based on filing status and withholding allowances claimed on Form W-4.

Expert:  Lev replied 1 year ago.

I specifically looked in old publications
See for instance same publication for 2000 tax year

page 13 left column - same rule was in effect - Your employees may not base their withholding amounts on a fixed dollar amount or percentage.

If you have a reference on documents that state differently - I would be glad to verify.

Customer: replied 1 year ago.
I'm sorry my tax question was answered
Expert:  Lev replied 1 year ago.

I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you with all tax related issues.

Customer: replied 1 year ago.
I want the employer to base my withholding at a fixed amount for two weeks because of the amount of hours we will work it puts you in such a high tax it's not worth the hours . This is a loop
Hole and for some reason many do not no of this but the IRS is aware of the fixed amount for shut down type work . In the tax code I believe in talks about this on the back of the page where it describes maratal status , and number of allowances you would normally clam . I'm responsible for my tax liability at the end of the year and I pay my taxes . so what would be the reason I could not choose a fixed amount for a few weeks out of the year . I've done this many times in the past and the IRS was fine with this just not married and 99 so my question wasn't answered . I'm very aware of the normal calming status base on marriage and number of allowances . This is in the tax code and it is allowed just have to dig a little deeper before I can credit you . Ever time we have been told the same thing that we can't do this yet every time we did because the guy working with us knew the code and pointed it out to the employers . Each time it was allowed .
Expert:  Lev replied 1 year ago.

The IRS official document that I referenced above contains a clear and direct statement -

Your employees may not base their withholding amounts on a fixed dollar amount or percentage.

If some employers were doing differently - that seems as contradicted that IRS direction...

I am not aware that the IRS ever allowed different withholding principals from wages.

If you contact any of such employee and ask for IRS document on which they based percentage withholding - I would be glad to verify.

So far -= all documents I see state differently.