User Support Forum

Our youth pastor kept his W4 info the same as last year and his pay has not changed:

FIT-M
claim - 0

Yet, there is $1.00 difference between the first check in January and this last check. It went up $1.00 in the FIT. Is this because the personal exemption rate changed? Even though when a person claims '0' the "Exempt/Year" shows up as 0.00?

I just want to make sure.

Thank you!

Have a blessed day!

Is there someone that can help me with this? We had 2 checks in January...the W4 info was submitted and input before the second check was cut but there was no change made to the W4 info or the pay rate - the only change is the personal exemption rate has gone up from last year. Would this make a difference given the information from the previous post? Would it affect the FIT by a $1.00?

I am getting ready to cut checks again soon and would like to be able to understand why this happened.

Thank you!
Tammy

I've not done anything with payroll at the church I'm currently in, but if the withholding rate changed, it does affect the amount withheld !!

Did you make any changes to the payroll information at all?? The withholding tables changed a little for 07. If you changed these in your tax tables the withheld amount should be less not more. The amount of change would depend on the amount paid.

Thank you for replying - I've been out sick!

Yes, I did make the changes to the tables (tax tables were updated per Table 7 of the Circular E and the 2007 personal exemption rate was changed to reflect $3400.00). I'm not sure if I was clear though. His check increased in FIT by $1.00 - meaning on the second check he received $1.00 more than he did on the first check (so his first check might have been $1000.00 with FIT being $99.00 his second check would have been $1001.00 with FIT being $98.00).

I hope I haven't made this more confusing! I'm just wanting to make sure that my numbers are correct before this gets too much further along - also, I'd kind of like to understand why this happened.

Thank you so much!
Tammy

This is exactly what I would have expected. There is nothing wrong with the numbers. Any time you make a change to your tax tables the amount withheld will change. In this case the amount in each tax bracket increased by a small amount. This means that the tax rate actually went down and less was withheld. You can make a little more money within that lower tax bracket. Also the personal exemption went up by $1000. This means there is $1000 more in tax free money that can be earned, again meaning less will be withheld. So apparently the combination of these two changes reduced the withholding by $1.00 therefore increasing the net pay by $1.00. Hope this clears this up for you.

And I hope you are feeling better.

Tom,

Thank you! That does help...and thanks, I am finally feeling better!

Tammy