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IRS Alternative Withholding Methods - Avoiding Underestimated Tax Penalties

Tuesday, 11 December 2018  10:00 AM PST, 01:00 PM EST

Training Duration = 120 min                  Sponsored by Online Compliance Panel

Click Here to register $200.00

Click Here to register and receive CD recording $400.00

This course will provide knowledge of alternative methods to compute withholding under special circumstances. In some cases, these methods can be used in place of employee's making multiple changes to Form W-4 to avoid over-withholding on supplemental or irregular wage payments, such as commissions or bonuses.

The danger for employers and payroll professionals is that failure to withhold the correct amounts per employee W-4 parameters may result in penalties and possible personal liability for the amounts the employer failed to withhold imposed on individuals deemed responsible for correctly collecting and paying employee taxes.

Learning Objectives:

In this webinar you will learn

  • How to compute the "correct" or target annual withholding to avoid underestimated tax penalties
  • The part-year withholding method - what it does, when it works, and how to use it
  • Which methods require an employee request and which are employer options
  • How to test an employer designed method to assure compliance with IRS requirements
  • Which methods smooth withholding when compensation varies pay period to pay period
  • Which methods soften the impact of bonus payment withholding without changing the W-4
  • How regular use of the cumulative wage method automatically adjusts for fluctuating compensation

Why Should You Attend:

The IRS has developed several alternatives to the traditional withholding methods. These methods are designed to provide a withholding amount that is closer to the "correct" amount of withholding required to meet the employee's tax obligation.

The methods can be useful when employee compensation varies from pay period to pay period or in special situations such as part-year employment. Employers may even design their own methods so long as the results fall within certain parameters.

Areas Covered

Topics covered include:

  • The requirement to withhold and Form W-4 claims
  • The percentage and wage bracket methods with an example of use of the daily or miscellaneous withholding tables
  • Methods used to compute withholding on supplemental pay including examples
  • Automated systems tables
  • Annualized wage method - what it does, when and how to use it
  • Average wage method - what it does, when and how to use it
  • Cumulative wage method - what it does, when and how to use it
  • Part year employment method - what it does, when and how to use it
  • Other methods and maximum permissible deviations rules
  • Non-resident alien withholding rules

Instructor

Patrick A. Haggerty is a tax practitioner, author, and educator. His work experience includes non-profit organization management, banking, manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent tax payers at all administrative levels of the IRS and is a Certified Management Accountant.

He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including payroll tax issues, FLSA compliance, and information return reporting.