2110999
Hello, I work a job where I will sometimes work about 4-8 hours of prevailing wage work per paycheck. My company gives me a separate pay check with these hours worked alongside my regular paycheck.
Is this normal? I end up owing around $800 State (CA) and usually about $50 federal every year, so I have recently started adding $50 to every paycheck to not having to pay a lump sum at tax time.
I am a Renter and file the standard deduction.
Please let me know if there are any questions I can answer to help out with the question.
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No, it is not normal, but it could be appropriate depending on the situation. What kind of work do you do and what kind of tax documents do you receive? Do you receive a W-2 and a Form 1099 that totals up to your total income?
Most workers are classified as either an employee of someone else or self-employed. Each status has its advantages and disadvantages. Self-employed individuals have the advantage of being able to deduct their expenses on a Form 1040, Schedule C, Profit or Loss from Business, as direct offsets to income. However, they must pay the self-employment tax.
There is one category of workers—statutory employees—who can enjoy the best of both worlds. They are like independent contractors but without substantial investment in the facilities used in the performance of services. The determination of who qualifies as a statutory employee turns on the facts of the situation. The link above explains in greater detail.
If you are not a statutory employee and your employer is erroneously paying you as an independent contractor, they could be shifting their payroll taxes to you, which is not appropriate. The IRS does not allow employers to do this. Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.
Hello @DawnC,
So I only have 1 W-2. The Hours are given to me on a separate paycheck but end up going toward my total earnings. What I think might be happening is since these paychecks are given out to me as a regular 2 week pay cycle, but are around $300-$400 dollars, they are taxed in a lower bracket and not enough is taken out. Then at tax time, all the wages are included I was not taxed enough and end up owing. This is what I presented to my employer and asked if they could include everything on the same paystub but they said they could not.
Does this make sense?
Is all of your income you receive during the year reported on your W-2? When you get those checks, do those amounts count in your ''YTD earnings'' totals? You decide how much is withheld (via Form W-4) for income tax from all of your wages. You can certainly give them a W-4 to increase your withholdings if not enough tax is being withheld from those smaller paychecks. As long as all the wages are included on your W-2, they are paying their share of the Social Security and Medicare tax.
Yes, all of it is accounted for. Ok, so they are doing things correctly on their end, it is just an odd situation that is resulting in me owing at the end of the year. Yes, I currently am filing as Single, 0 Dependents, with an additional $50 per paycheck in federal taxes. (this is only done on 1 pay check if I receive more than one in a pay period)
I guess I will just add an additional $50 to my state withholdings so I don't have to deal with a big lump sum at tax time.
Thank you @DawnC for all of your help.
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