Withholding on Form W-4

According to the Spring 2009 edition of the SSA/IRS Reporter (see www.irs.gov/pub/irs-pdf/p1693.pdf ), the following statement was added to the 2009 Form W-4 instructions based on a recommendation from the American Payroll Association, even though flat amount or percentage of wage withholding has never been allowed: "For regular wages, withholding must be based on allowances you claimed and may not be a flat amount or percentage of wages." The IRS notes that while payroll professionals are familiar with this rule, "they've often had a hard time convincing the workers who have insisted on incorrectly completing their W-4s." The IRS recommends that employees use its withholding calculator if they are having problems making withholding calculations on the W-4 worksheets.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.