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What is the deductions amount that should be deducted from a $7,000.00 check?

Hayward, CA |

I just completed an out-of-court settlement with my former employer, for the amount of $7,000.00. In our contract he said he (by law) must deduct all tax requirements from this check. So...I was concerned about the amount so he said fill out a new W-2 for me (which I did) with many deductions so very litttle will be deducted from the check. I got the cashiers check in the mail today and a whopping $1,633.80 was deducted from my $7,000.00. I claimed 20 allowances/deductions (what ever they are called). With thsi many dedustions, should this huge $1,633.80 have been deducted? Is this a correct amount to deduct? HELP please...confused. I am aware there will be a big amounty at the end of the year I would be responsible for (of course) with the big amount of deductions but darn...

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Posted

You forget that there is also social security taxes and state and perhaps local income taxes withheld. Get a detailed breakdown and then have it looked at by a tax attorney or a good tax accountant. It may be that this amount id in fact correct but you need the details.

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LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

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Posted

There is probably at least $500-600 in payroll taxes. As to the other $1000 you will just have to get the detail to be sure.

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You are not going to help yourself by posting the same question in parts several times. Please understand that we all volunteer our time to help and this is not considerate of that effort,. You said the $75 was for a tax garnishment to the IRS so you know what that is and as I said, the levy or garnishment has to be honored until the employer is told otherwise. Your telling them you paid it is not enough. This is a legal forum, not a CPA forum so take this stub to your tax preparer for confirmation. NEXT TIME, don't do this yourself. This all should have been part of the settlement process.

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