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Communicate Tax Changes

In recent weeks, several numbers have caught my attention because of their implication for both the economy and for employers. Without a lot of comment, I am providing links to the material from this blog post and tomorrow’s blog post. I’d love to see these numbers spark some discussion on the site. I am especially concerned because of what they are telling us about the changing American economy for business.

It feels a bit like under the cover of darkness, the IRS has quietly published new withholding charts for 2010. These employer required withholdings are best described to employees before they believe their employer is the responsible party in their changed withholding amount. I have not seen this discussed many places, so thought I’d raise the isue for your review. In my company, our Finance VP went directly to our CPA firm to understand the implications for our employees.

We did not want our employees surprised during a year when raises and bonuses have been scarce. We wanted them to have the necessary information and understand its implications for their financial circumstances, without placing blame for any changes on the employer. While the new rates for withholding may be inconsequential for some employees, others may experience up to $200.00 less in their paycheck.

In a year when employee raises were scarce, any additional reduction in pay, even temporarily, may affect some employee families. So, we have announced the changes to our employees. Secondly, we do not want our employees believing that the hit to their take-home pay is something the company did, when, in fact, the new withholding amounts apply nationally to all employees.

Additionally, you may want to contact your employer to adjust your withholding tax to more closely align with your expected 2010 tax obligation. There are certain circumstances under the Making Work Pay Tax Credit that may result in your employer withholding less tax than you prefer. Find out more about the Making Work Pay Tax Credit.

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Communicate Tax Changes originally appeared on About.com Human Resources on Saturday, February 6th, 2010 at 10:20:36.

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