I have pre-tax medical and retirement taken out but when I calculate out how much of my total gross I take home, the percentages indicate the taxes are being calculated on total earnings, not the total after pre-tax deductions. I thought that was the benefit of pre-tax deductions - you didn't get taxed on it. If anyone knows of the legal writings for payroll practices, I would like to know, thanks.
2007-01-12 01:52:05 · 4 answers · asked by littleschum23 1 in Business & Finance ➔ Taxes ➔ United States
Tish is correct + don't get hooked staring at the stub. You find out how much you really pay by doing the return. Only if the W-2 seems to have too much gross fed taxable (ie Pre-tax items not excluded) should you even pay any attention at all.
2007-01-12 06:12:48 · answer #1 · answered by vegas_iwish 5 · 1⤊ 0⤋
I used to work for a payroll service. It's been awhile, but if I remember right, they figure FICA based on your total gross income and the federal withholding is based on the gross minus your pretax deduction.
2007-01-12 01:56:16 · answer #2 · answered by Tish 5 · 1⤊ 0⤋
Taxes are not supposed to be calculated including pre-tax medical & retirement. Just ask your employer maybe it's just an oversite..
2007-01-12 01:56:40 · answer #3 · answered by Karrose 5 · 0⤊ 0⤋
they won't tax your pretax deductions, hence the name
2007-01-12 01:55:37 · answer #4 · answered by Simba 4 · 0⤊ 0⤋