Medlin Software, Dennis

The itch is for those who give W4 advice not to lazy out and give some unusable percentage of income. I get it, perspective, the pct is likely close, but yet, unusable by the employee.  At a preparer, you likely cannot even be sure what method the employer uses (there is software which allows/requires the employer to maintain calculations, so one cannot assume employers are accurate). And even if you can prove the employer is not doing things correctly, as is the consensus here, every time, making waves with the employer is not something to suggest.

So indeed, a flat % suggestion is a huge peeve of mine, and of every employer who deals with the employee who wants a flat rate. That is why it, assuming not wanting to get involved with actual W4 prep (which I asked here before, and the consensus was not to do it, as a tax preparer), it is cleaner and more helpful to give a number to meet, either through WH or direct deposits, and let the employee figure it out. If you want to be thoughtful, give a formula showing the amount divided paydays per year to compare against what their employer withholds.

16 minutes ago, kathyc2 said:

Say what????  Those of us who understand how they work can use the formulas to calculate what the withholding will be based on the W4.  

Clients want different things.  Just this afternoon I had a gal with a balance due of around $600 federal.  She doesn't want to have a balance due whether there is a penalty or not.  Just told her to have an extra $15 a week withheld so next year should be close to break even.

Another young couple had a 13K refund.  It's due to withholding and not refundable credits. Asked if they wanted to adjust W4 to have a smaller refund, and the answer was no, they want the big refund.  Not what I'd do, but it's their money.

One thing we should all do is when a dependent is turning 17 or graduating college give them a heads up how that will affect next year.  

If you believe the employer's withholding obligation (15T) has ANYTHING to do with the employee's tax liability, I have a deal on a bridge for you.

3 minutes ago, kathyc2 said:

They still publish the tables and formulas in Pub 15T.  If the pay is consistent from pay period to pay period you should be able get close as to what withholding will be.  If pay varies widely it's much more difficult. 

The calculation/tables are for the employer to meet their legal requirements. They have NOTHING to do with taxpayer liability, especially so since 2020. Really, it is to a point where the calculations/tables could go away, with a "no W4, 25%" type of deal, and let employees to withhold using a dollar amount or pct each pay period, or better yet, a dollar amount or pct for the year.

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I will share what I give as advice. It is easy to calculate what will avoid penalty. I go with 100% of the prior year. One could elect the other option(s), but this one is clean. Divide by paydays per year. Give that number as the minimum amount they should see on each check. If their check shows too little, add/increase the additional amount on their W4. These are things any employee can do.  No need to alter anything on their W4 but the additional.

If they want to let the IRS be their piggy bank, they can add whatever per paycheck amount they wish as additional. If they want to keep it closer, they can self monitor their estimated liability and leave me out of it.

18 minutes ago, Abby Normal said:

It's called adulting.

Agree. I will not agree a professional giving an unusable % is professional. Such advice costs the employee time/money to try to figure out, and likely costs the employee goodwill with their employer if they present the "professional" percent and demand the employer comply. I have had those arguments, and know how it works. "My preparer says to withhold this %, make it so, or I will raise a stink". Then, the employer contacts me, the software person, and asks how to get the employee off their back.

Do you professionally believe a person, who is not capable of their own tax prep, and is not capable of filling in a W4, is capable of handling a flat % WITHOUT pissing off their employer?

6 minutes ago, Lee B said:

It's ironic since W 4V allows you to choose 7%, 10%, 12%. or 22% to be withheld from your monthly social security check.

If you want taxes to be withheld from your RMD you get to choose a pecentage for both federal and state tax to be withheld.

No more mor "ir" onic than the IRS feeding 941 forms into scanners - still.

There is no way we will ever get to any flat federal handling, as it could lead to the mythical postcard return, and a loss of tens of thousands of j o b s.

8 minutes ago, Abby Normal said:

It only helps if they can do basic math.

You are expecting someone to monitor each of their paychecks?  Someone who is not capable of preparing their own return?  How about the clap back from the employer you are causing when the employee nags at the employer to withhold your magic percent?

While still not professional (to me), looking at the liability for the ended year is reasonable, as is suggest the employee to make sure at least that amount is withheld for the current year, is reasonable to avoid penalty. Some magic percent is random, unless the goal is to be able to show how much refund you were able to make appear.

What is accurate is to give a starting W4, and review in Sep or Oct to see if anything can be changed to get closer to 0 refund/owed. I do not believe in using a refund as a piggy bank.

As I have been shown here, most preparer types do not want to get involved in W4. That is great too, freedom of choice and all. Flat % suggestion, to me, is a "here you go, now go" type of response, which has zero to do with accuracy for the upcoming year.

The now several year old W4 is MAGIC for those of us who use it to the fullest.  One can enter enough 4b, and 4c to do what some call holy grail, a fixed dollar amount per check.  Now THAT is more likely to be accurate than some sort of constant monitoring for meeting a %.

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This is a huge issue for me, as I have shared often. Employees get the flat % from someone, and demand the employer comply. Some will even write it on their W4. While a flat % may be the end liability, as anyone can calculate after the fact, it does nothing for the employee, and when the employee tries to get the employer to comply, causes a headache for the employee and employer.

A pct is worse than silence. Gives the tp nothing accurate unless that have zero changes for the new year, and even then, it is useless because it does not factor the inflation adjustments. 

DD never took hold. IIRC is not required for those with <250 employees. Not sure about 250 or more. 

A rare bird sighting. A client who is questioning a deduction!

See if both are using the same banking info (assuming direct deposit of refund). If they pay retainer by check, are both names on the check? There may be some non invasive ways to make your determination. Sans some sort of divorce or separation papers, it is likely best to start with "prove you are not one household".

2 minutes ago, Lee B said:

ATX has had memory leaks ever since the program was rewritten with a shareware database called "Raven" back in 2011,

sometimes referred to as the "2012 Debacle".

 

Interesting. As likely the longest tenured and last of the original shareware authors/entities, I can agree, some things marketed as "shareware" are good, some are not.

26 minutes ago, mcb39 said:

Mine is turned off every day.  You assume incorrectly.  His instructions are to boot up in the morning.  Then hit restart so it closes and then reopens.  I have no issues with the program shutting down during the day.  As the season progresses, we might even do a restart after lunch.

I have never come across anyone saying the way to keep the computer clear is to boot in the morning AND restart after booting.  I am not sure what is gained from the restart that the overnight power off provided. Maybe something new or that I am not aware of?

Requiring a mid day restart certainly points to a "leaky" program. Sounds like there are known memory leaks/issues, for many years.

1 hour ago, mcb39 said:

FYI:  My IT person has advised me to prevent issues like this by restarting my computer every day as soon as I turn it on.  So far, so good!

I am assuming you are not implying Turing it on, off, then on again, but just Turing it off and on daily.

If there are memory leaks (not freeing up any self managed memory, or an app poorly coded, not doing proper clean up) with something you use, then yes.

i find memory management in a cfg file even more old school than me. Windows manages memory well these days. It is rare when an app needs to manipulate something manually, unless it is doing other hand coded memory “things”.

For me, my main stays on all the time unless forced to restart by my own testing or a windows update. But, starting in a few months, I will be able to turn it off as I rework my software license process to be self healing (and not require me to send an email). I’ll likely still leave it on unless we are traveling.

Sounds like a win win service.  As I still believe once or twice a year revisit of W4 and withheld amounts would be. When I read about large returns or balance due, I read it as missed opportunity to provide a profitable service. Not only on its face, but to likely improve/ensure retention. Unless the customer believes a refund is favorable to them.

1 hour ago, Christian said:

He is out of employment for some time and needs the money. I was a bit skittish about using the "Where's My Refund" function to obtain refund info on a client.

If they pay for your time, maybe write out the steps they can use themselves, versus you acting for them. If they cannot pay for your time, or you do not want to charge for the advice, make sure your standard rate includes enough to give some level of advice, if you want to be in the non tax prep advice business.

I get similar questions all the time.  But, I do not want to act as my customer's payroll processor, manage their funds, check their payment status, balances, etc., since I have zero interest of getting looped in their liability chain.  I do not try to teach how to use the web sites of others, such as how to use SSA BSO, or EFTPS, as the entities which run those sites provide fairly well done documentation.

But, to be balanced, this year, with more than ever having to efile W2 data, I may look at being a transmitter (for a fee) since many neglected the advice to register with SSA BSO in a timely fashion.

Something else to ponder. If the emails are truly targeting users of a specific software, then that software vendor is likely selling your email address. Ties back to always using an individual email address for each subscription/software/newsletter/etc. so you can see who does what. There are many ways, an example is the gmail "plus" method. Your email provider can tell you how.

If the email reading software allowed such an easy click through, then that is item one to resolve. Make it so links cannot be clicked through without some sort of safety process. Text based readers, at least for the first run through are great.  I used MailWasher before. Email software should have the ability to show messages in the text version (not html) by default, which will make it impossible for a novice (such as an employee) to easily open a link.

When viewing a message as plain text, the links are shown fully, not something like "Click here, I won't steal anything". That is where something like mail washer comes in, as nothing (IIRC) is clickable.

Is there an opportunity to charge for reviewing and adjusting withholding/deposits to avoid a refund large enough to “need”?

10 minutes ago, DANRVAN said:

 

Your second statement contradicts the first.

I was trying to leave open the possibility of the incorrect reporting requiring the preparers time/expertise/research. Maybe you would not charge extra for asking what to do, or taking on the liability for the add/reverse being questioned / preparing a sign off absolving liability for the add/reverse, proposing options, etc.

I no longer prepare for others, so I no longer have to account directly for my minutes. I (maybe incorrectly?) thought preparers, like JD's, bill  in some time increment for research/discussion (in addition to likely per form, flat fee, or combination).

16 minutes ago, DANRVAN said:

Easy for you to say.

I have been able to help some, but on others spent hours trying to resolve cases that have gotten nowhere.  

 

 

Why spend hours?  Either the employee does not want to make waves, so the report and reverse method, the employee wants to try getting a correction, so the employee tries to get a correction, or the employee wants correction and does not get it, so the SS-8. Where do hours of preparer time come in? Am I missing something? Why would a preparer get involved with their client's employer?

The most similar in my work is when an employee gripes about their WH, either too much, too little, or wonders why they did not get a big refund.  The employer say something like "I used the correct calculations based on the direction you gave (W4)". No discussion, no telling the employee what to do. No teaching the employee how WH works. The employer does not have to defend their proper actions, the burden is on the employee (like the burden is on the client to decide how to handle, and if desired, fix, the issue in this thread).

A church should be the ONE employer who is likely to fix their mistake in a timely fashion. It is on the TP to get fixed, or pay the preparer to push for fix. If I were the employee, and it cost me anything for the error, even to pay a preparer to get the fix done (extra time to report.back out, or push for proper W2), I would be billing my employer.

But, I an hugely jaded after 40+ years of payroll, and an employer who cannot do their duty should be held to task.

1 minute ago, gfizer said:

In my situation, they are going to issue a 1099-NEC for the total amount paid, showing both the salary portion AND the housing portion as non-employee comp.

That stinks. Sadly many people make mistakes. More common when there are .volunteers. Likely no one in the church office knows the proper method (as no one with proper knowledge is reviewing/preparing), so I would start with the person who is in charge of finances, or better yet, the paid accountant/tax preparer for the church. If there is more than one clergy person, get together and speak as a group. Don't delay, as the HA incorrectly reported will me major $ if not corrected.

The church can send what they want. The employee has no concern with 941 issues. Of course, HA should be reported to the clergy person on letterhead, usually showing the amount for the year ended, and the pre auth (required) for the upcoming year. There is zero requirement for HA to be on a W2 (and I am a stickler for not adding non required things to a W2).

A 941 is filed, as there were wages, even if not taxable. Another example is a seasonal business will often have to file a zero wage 941. Any ongoing entity with payroll during the year, and the IRS expects 4 941's or if allowed, a 944. Even the option to tell the IRS there are no more 941's for the year is not something I suggest as it is cleaner to have 4 per year.

I meant I have no liability for the customer sending me an email, or what they choose to send. Of course, I don't open unexpected things, and the things I open, I do so with proper security steps in place.

A customer sending me something bad because of contacting me for help?  Possible, but has not happened yet. I don't overly spend time on worrying about baddies. I prepare for any issue via multiple backups, spare machines, and using my grey matter to control my voice and finger commands.

Personally, I am not concerned about what a customer does, such as sending me data. I am careful what I do eith their data once I receive it, and spell out my process in my privacy notice.