Federal Tax Withholding Incorrect

[lbhutch13]

The title of this thread has been edited by a Square Moderator from the original: Federal Tax Withholding

A few of my staff have no federal tax being withheld from their bi-weekly paychecks. This has resulted that they owe federal tax this year. Square support said that their calculations are correct in the "system" but won't tell me how to calculate what it should be. Has anyone had this trouble? My staff work part time, so this makes them not want to work if its just making them owe taxes.

[Sammie_C · Accepted solution]

Hello @lbhutch13, thank you for you post. I am sorry to hear that this has been occurring. 

I checked with our Payroll team and said that they took a look and the calculations are correct. They would recommend your employees take a look at their W-4/tax info in Square Payroll and adjust it if needed for more tax to be withheld.

They also mentioned that a couple years a new W-4 was released and it may look a bit different then before, which is why additional editing may be required.

I hope this information helps a bit. Perhaps some other sellers can chime in if they have had a similar experience, as well!

[Range23Brewing]

I have reviewed all of my employees withholdings because this has come up for us as well. I have only two employees who have Federal Income Tax being withheld from their checks. One of them it is because he entered that amount under "Additional Withholding". The other employee does not and yet he has Federal Income Tax being taken out. They are the only two. No one else. All of my employees are working more than one job and they are all part-time. 

Additionally. The one who has Federal Income Tax being taken out has the exact same tax situation as another employee (same filing status, same dependents, etc) and the other employee does not have Federal Withholding taken out.

Seems there's an issue here. I know that I can let my employees know to have me take out additional taxes to "fix" this issue, but shouldn't that be calculated properly without them having to do that? Why the discrepancy across two employees with the same filing situation?

[TheRealChipA]

Hi there @lbhutch13.  Adding to what @Sammie_C  said.  In the few cases this has happened to me, I came to find out that my employees had checked the “exempt” box for federal and/or state taxes.  Also, in one case, they had claimed too many exemptions.  I always recommend that single people claim as Single/0 on both federal and state taxes and usually even my high school kids get a tax refund at the end of the year.  But if they are confused about how to set up their W4 information, a quick visit to H&R Block (or other tax preparer) will help them get this right.