HR Training 2021 - Withholding Computations for Unusual Circumstances to Avoid Under-withheld Tax Penalties

Overview
Employer federal income tax withholding is intended to collect, throughout the year, the approximate the amount of the employee’s tax for the year. The wage bracket and percentage methods are the primary methods for computing the amount to withhold, but sometimes they just don’t seem to get the right result.
When supplemental wages are added to the equation, the prescribed aggregate method and optional flat rate method frequently result in too much or too little withholding. Payroll professionals sometimes experience a flood of revised W-4 Forms just before and after scheduled bonus payments. This creates additional work and opportunities for mistakes for the payroll department and may not affect the withholding in the way the employee expected.
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