Author Topic: Incorrect Withholdings- Would you contact a professional?  (Read 235 times)

NorCal

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Incorrect Withholdings- Would you contact a professional?
« on: July 09, 2018, 05:28:53 PM »
So we have an interesting tax situation.  I know this question would require a professional to answer, I'm just not sure if it's worth paying a professional to handle now, or if we should just work it out at the end of the year.

We currently reside in California and pay CA income taxes.  My wife accepted a new job in Colorado.  She started this job in June (working remotely), but we are not relocating to CO until 8/1.  So we have ~2 months CA taxes from the new employer.

The new employer is a small firm, and they can't figure out CA withholding.  They've already withheld CO taxes for June and part of July.  This will leave us under-withheld from CA and over-witheld from CO.

I'm not worried about the total difference in withholding.  We can manage that.  What I'm worried about is CA coming after us for under-withholding. 

Is this something you'd pay a professional to figure out now?  Or would you just deal with it at tax filing time?


SeattleCPA

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Re: Incorrect Withholdings- Would you contact a professional?
« Reply #1 on: July 09, 2018, 06:00:49 PM »
Just deal with this at tax time... maybe squirrel a little extra away to deal with any tax liability. No need to do more IMHO.
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MDM

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Re: Incorrect Withholdings- Would you contact a professional?
« Reply #2 on: July 09, 2018, 06:28:04 PM »
What I'm worried about is CA coming after us for under-withholding. 

Is this something you'd pay a professional to figure out now?  Or would you just deal with it at tax filing time?
Will you be so under-withheld that you will be subject to California underpayment penalties?

NorCal

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Re: Incorrect Withholdings- Would you contact a professional?
« Reply #3 on: July 09, 2018, 09:46:43 PM »
What I'm worried about is CA coming after us for under-withholding. 

Is this something you'd pay a professional to figure out now?  Or would you just deal with it at tax filing time?
Will you be so under-withheld that you will be subject to California underpayment penalties?

Thanks for the link, that was helpful.  Based on some very crude math, the rough withholding for this period would be about $1,700.  Of course, we're starting form a point of likely being slightly over-withheld.  I guess 5% of $1,700 is $85, and I'd be hard pressed getting help figuring out estimated tax filing for less than $85.

Annoying.

Thank you for the replies!

MDM

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Re: Incorrect Withholdings- Would you contact a professional?
« Reply #4 on: July 09, 2018, 10:07:48 PM »
...I'd be hard pressed getting help figuring out estimated tax filing for less than $85.
You may have to pay one quarter's worth of penalty, but using Web Pay for Individuals | California Franchise Tax Board to submit a $1700 (if that is ~the correct amount) estimated tax payment now should erase the penalty for the rest of the year.