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Federal tax withholding charts are also known as federal tax withholding tables. These tables let employers figure how much to withhold from their employees paychecks to go towards their income taxes at the end of the year.
Due to the Jobs and Growth Tax Relief Reconciliation Act of 2003 workers will receive more money in each paycheck. This act made the withholding table incorporate lower tax rates to employers to use when they are figuring out how much money, or income, to withhold from each of their employee's wages.
All employers should be using these new tables by now, but if not, they should try to reset their payroll programs as soon as they can manage. Each employer should have already been given a printed copy of the Publication 15-T which contained a 64 page copy of all of the withholding tables.
According to the new releases Congress notices that tax payers had been over-withheld on their taxes for a long period of time and would always receive a refund check at the end of the year. At the beginning of 2003 many people had already had a larger amount taken out of their checks and it was decided withholdings that they would get a refund of these withholdings through their next income tax filing at the end of the year just as they normally would
Employees are still able to adjust how much is withheld out of each check by choosing their number of dependents to make sure that the amount of tax they pay is closer to what they owe but they still cannot claim any more allowances then they are legally allowed. In order to avoid estimated tax penalty due to not paying in enough taxes during the
the year the IRS is suggesting that workers should wait a year and see how much their deductions from each paycheck drop before changing the number of deductions they have in each paycheck.
The tax withholding tables will continue to change over time in relation to the amount of taxes that people are required to pay each year in taxes. If the amount of taxes you are required to pay each year goes up then the amount that is withheld from your paycheck should go up as well. |
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