Local Tax- Real time Taxation, NOT ANNUAL AMOUNTS USED!

[bjdona0]

I have a local tax structure which taxes at a certain rate (0.007097) for the first $25000 in salary, then afterwards adjusts down to 0.001097 for any salary above and beyond. When we go to pay our quarterly local taxes, the table that we have set up in Power Church always comes in much lower than needed in the first three quarters (for those whose incomes greatly exceed 25k), due to what I suspect is the fact that PC is basing the withholdings of tax table on the entire calendar's salary, prorating the first three quarters to be balanced with the fourth (at the lower tax table rate). Our problem is that the taxes are paid to the County as they are earned (i.e. all salaries are taxed at the higher rate until the real salary goes over 25k, which doesn't happen until some time in the third quarter.) How can I set up a tax table that taxes in real time and not assuming averages over the entire year?

[NeilZ]

I have a local tax structure which taxes at a certain rate (0.007097) for the first $25000 in salary, then afterwards adjusts down to 0.001097 for any salary above and beyond. When we go to pay our quarterly local taxes, the table that we have set up in Power Church always comes in much lower than needed in the first three quarters (for those whose incomes greatly exceed 25k), due to what I suspect is the fact that PC is basing the withholdings of tax table on the entire calendar's salary, prorating the first three quarters to be balanced with the fourth (at the lower tax table rate). Our problem is that the taxes are paid to the County as they are earned (i.e. all salaries are taxed at the higher rate until the real salary goes over 25k, which doesn't happen until some time in the third quarter.) How can I set up a tax table that taxes in real time and not assuming averages over the entire year?

Which version of Powerchurch are you using ... this is needed in order to give you the correct answer.

[bjdona0]

PC 11

[NeilZ]

Either v 11 version makes it easier to create tax tables so that helps, however, I suspect that Powerchurch is not the only payroll software that uses annualized tax tables. I would think that there is some method of doing this set up.

If you could let me know what county and state (city also if needed) I can do some additional research.

[bjdona0]

Kenton Co, Kentucky

[bjdona0]

Still haven't heard from anyone on this... how can I get PC to stop this? We are now half way through the year... I am personally almost $50 shy on my local withholdings (ie, the church has withheld less than what it has paid out on my behalf) and at this point I am banking on the corrective that PC will make over the next 6 mos so that the math ends up right in the end. However for next year I am considering creating my own set amounts for each employee for every quarter based on their expected earnings and avoiding the tax table altogether, which seems quite silly to have to do. Any other suggestions?

[NeilZ]

Still haven't heard from anyone on this... how can I get PC to stop this? We are now half way through the year... I am personally almost $50 shy on my local withholdings (ie, the church has withheld less than what it has paid out on my behalf) and at this point I am banking on the corrective that PC will make over the next 6 mos so that the math ends up right in the end. However for next year I am considering creating my own set amounts for each employee for every quarter based on their expected earnings and avoiding the tax table altogether, which seems quite silly to have to do. Any other suggestions?

Unfortunately, it does not appear that the way your county does taxes can be done currently in Powerchurch. I did look at the tax requirements, and I'm not sure if there is a way to adjust the system to cover it. This may be something you're going to have to computer and enter manually.

That said .. Zorak .. any ideas!!

[Zorak]

Unfortunately, from what I can see, the only way you would be able to do this is estimating the annual salary and processing this without a tax table. PowerChurch Plus uses all annual tax tables for calculations. If your amounts are coming out that far off trying to use the tax tables in PowerChurch, then your only option at this point would be to eliminate the tax table and enter the taxes manually.

[tborgal]

This may in fact be what is suggested here. But what I would try would be to calculate what the annual withholding would be and divide that by the number of paychecks to be issued annually then enter that number as a manual withholding amount from each paycheck. This will be off a little during the first 3 quarters but should give you the correct amount at the end of the year. If all paychecks are the same every pay period this should give you the correct withholding at the end of the year. If you have some paychecks that vary there will have to be an adjustment made at some point.

This is of course dependent upon how fussy your local government is on the accuracy of your withholding each quarter.