Tag Archive for Tax Withholding

Rate Increase and Withholding of Tax on Dispositions for US Property Interests

TaxConnections Member Larry Stolberg

An important tax update was made regarding the rate increase and withholding of tax on U.S. property dispositions. On December 18th, President Obama, signed H.R. 2029, the tax (the “Protecting Americans from Tax Hikes Act of 2015”) and spending bills (Consolidated Appropriations Act, 2016) to fund the government for its 2016 fiscal year.

The December The Act increases the rate of withholding from dispositions of U.S. real property interests under §1445 from 10% to 15%, but remains at 10% for residences sold for less than $1 million.

The withholding exemption where the sale price is under $300,000US and the purchaser will acquire the property as their principal residence is still in effect.

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August 2015 Individual Due Dates

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August 10 – Report Tips To Employer

If you are an employee who works for tips and received more than $20 in tips during July, you are required to report them to your employer on IRS Form 4070 no later than August 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

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Paying Too Much Or Too Little In Taxes? First Look At Your Withholdings

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Are you an early filer or do you like to wait? I guess some of that depends on whether you are getting money back or you owe! When my clients owe money to the government and we have gone down every route there could possibly be to reduce their taxes, I remind them about their missed October tax planning appointment and we usually look at their withholdings.

An employer requires you to give them information on how much tax needs to be withheld from your paycheck. Based on the information that is provided to them, the employer then proceeds to withhold & submit income taxes on your behalf to the Internal Revenue Service. This information from you is obtained by means of the Form W-4. Read more