Monday, January 17, 2011

The tax man cometh

Kris worked on taxes today. He had to change his spreadsheet for calculating employee federal tax withholdings. He used what they call the percentage method so it can be calculated - as opposed to looking at an approximately 20-page chart every two weeks to get the withholding for that period.

The government usually publishes other ‘alternative method’ tables. But they didn’t publish the one Kris was using for 2011 … at least not yet. (Oh, didn’t 2011 start 17 days ago, you may be asking yourself?) So Kris couldn’t just change the numbers, he had to change the whole formula.

Tax changes happen every year. Some things that change are good – like they changed the social security and Medicare tables. The employee rate went down, but the employer rate didn’t. So where you used to be able to take the same number and multiply it by two, now it’s different …

All this fascinating detail is why a lot of people hire this done. We do hire out end of the year taxes to be done - because of all the changes every year - it’s hard to keep up with the tax code. Kris already feels like he’s cheating by hiring the end of the year taxes done, and can handle payroll. But it’s not fun. No one loves paying taxes, few love doing taxes. But it’s part of owning any (legitimate) business.


I can’t help myself from taking pictures of the spectacular sunrises lately. I asked Kris if he saw the sunrise today while he was working, and he said, “Yeah, I appreciated it about one second before I went back to thinking about how cold I was.”

1 comment:

w.hamilton said...

The IRS is behind with 2011 stuff because the Congress was behind with the legislation.

I did TSC's payroll for years. It was tedious and time consuming. Tell Kris it's OK to "farm" it out. :-)