Income Tax

[spankingman]

Maybe some of you Finacial types can answer this question that bugs the hell out of me.

If an employer deducts the RIGHT amount of taxes etc from your payroll that the Govt. LAYS DOWN GUIDELINES FOR why do I still have to pay?????

Why isnt the employe penalized for NOT dectucting the proper amounts?

 

[Cycleguy007]

Maybe some of you Finacial types can answer this question that bugs the hell out of me.

If an employer deducts the RIGHT amount of taxes etc from your payroll that the Govt. LAYS DOWN GUIDELINES FOR why do I still have to pay?????

Why isnt the employe penalized for NOT dectucting the proper amounts?

I'm no financial wiz... but I think it is because EVERYONE has a different situation and everyone has different deductions they can claim... the Employer has no way of knowing all these intricacies, so they just deduct the "default" amount based on your income and regular exemptions. The filing of your return is your opportunity to try and get some of that back.

 

[drstrangelove]

If you end up paying more at tax time, don't complain (except if you don't have the money saved). What really bugs me is overpaying through the year and not getting your own money back until much later, and not getting an interest on it.

 

[hans4u]

It's sort of like a 'pay them now or pay them later' approach.

If you need more take home pay during the year, ask your
employee to reduce your tax contributions, however,
unless you have alot of RRSP or Charitable donations, etc.
to apply at tax time, you'll have to pay the government
what they allow above the basic exemption.

You could also ask them to deduct more during the year
so you might see a larger refund when you file.

 

[Dodger]

Speaking as a guy who handles payroll for our company. The software that we use is reasonably accurate, so long as the emplyee only works for us and they have no further deductions as noted above.

Rarely do our employees pay anything more at yearend, but if they have charitable donations or RRSP contributions then they will get money back.

We also have a couple of people who have asked to have additional tax taken off each cheque. That way if they get another part time job through the year they cover themselves, because CRA wants the tax based on your total income not just from each emplyer seperately.

If you have some investments that actually paid dividends this is also a good thing to do, as they are added to your total income. Although I doubt many will have investment income this year given the way the market has been.

 

[Mencken]

Maybe some of you Finacial types can answer this question that bugs the hell out of me.

If an employer deducts the RIGHT amount of taxes etc from your payroll that the Govt. LAYS DOWN GUIDELINES FOR why do I still have to pay?????

Why isnt the employe penalized for NOT dectucting the proper amounts?

Sorry but I have to say...stupid question.

The employer only knows a fraction of what the individual's financial and tax situation is, and there is no way possible for them to deduct the "right" amount.

Our system is built on the individual disclosing income from all sources at the end of the year...the employer deduction is merely so that the gov't gets some of your contribution a bit sooner from the employment income portion of your income.