Summit Blog
Thursday, July 08, 2010
Update your W-4
Chris works for Quicksand Investments. Chris still owed $100.00 loan to Quicksand when he was terminated for cause. When Chris’ final check was calculated he his federal withholding came to $126.77. To satisfy the balance owed on the loan his employer reduced the withholding to $26.77 and applied $100.00 toward the outstanding loan balance.
Did Quicksand Investments take proper action to recover its’ possible loss by providing this service to Chris?
The answer is no. The IRS Publication 15 (Circular E) states that the amount of federal income tax to withhold from an employee’s wages is determined by the marital status and number of allowances claimed form W-4. Additionally the IRS suggests you get an updated W-4 from your employees each year. However, if the employee does not provide a new one to you each year, it is acceptable to use the most current form you have on file.
You can find a current year W-4 on our website under the Downloads section.
Timothy Castillo, Summit HR & Payroll, Operations Manager