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Someone please help me with Payroll statement...

Discussion in 'Financial Aid' started by Qwest, Nov 5, 2002.

  1. Qwest

    Qwest Member
    7+ Year Member

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    Hello-

    Here's my dilema: I did paid-research over the summer and got paid from a $5000 grant.

    Can someone please help me with the following questions-

    1.) Why does my Current Gross Pay say $4,557. Do they take out some $500 fee from the grant?

    2.) Why is my Federal Witholding Tax 28%!? Out of $4,557 they're taking $1,253.39 in federal tax? That seems ridicously high. On the W-4 I claimed Single w/ 1 allowance (single and only 1 job). I still live at home and my parents are able to claim me as a dependent. Should I have claimed Single w/2 allowances?

    Is it the more you claim the less tax they take?? Or should I have claimed Single w/ 0 allowances?

    3.) Lastly, out of the $1,253.39 federal tax, about how much will I get back at the end of the year?


    Thanks!
    Mike
     
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  3. maysqrd

    maysqrd Go A's!
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    A grant for research only means the money to pay you INCOME is from a grant to the institution. It does not mean that it is a grant to you. This is earned income and is taxable. If you are claimed on your parents taxes then you should have marked the box that said someone claims you as a dependent and this would have made you exempt from paying the taxes (unless you make over the federal minimum for depedents). Next time read the entire W-4 before you fill it out or talk to your parents since they do all of the tax filings in your house.
     
  4. paean

    paean Senior Member
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    In answer to the tax part of your question:

    You are required to be honest when filling out a W-4 (unlikely, but an IRS audit is possible, and if they feel that you lied, they can bring charges against you). So you need to read the info about claiming yourself and other exemptions, and follow those guidelines. Most likely, you will have no exemptions. If you had several, they do withhold less, but it's not legal to make them up.

    The reason they took a "high" 28% out of your income is that taxes are figured as if you will make that income all year. So summer jobs are often withheld at higher rates than students expect, because the IRS guidelines assume you make a consistant income, while you know that you are making 5K for the whole year.

    If you want to know how much you get back, go to www.irs.gov, and fill out a mock 1040EZ, and use the tax table to calculate your return.
     
  5. DrZippy2b

    DrZippy2b Senior Member
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    The amount of taxes that are removed from your pay is dependent on the number of exemptions that you claim. So if you want less money taken out now, you would claim more exemptions. If you want a larger return at the end of the year, you would put smaller (probably zero) exeptions.

    As for will you get it all back at the end of the year, probably almost all of it.

    Good luck!
    Nikki
     
  6. DrZippy2b

    DrZippy2b Senior Member
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    Sorry, one other thing... on your W-4 you can claim as many exemptions as you want (within reason) so in your case probably zero or one, if you were married, zero, one or two. But you MUST claim the correct number when you file your taxes on your 1040 (ez, a, whichever you use) and realize that by claiming more exemptions throughout the year, you are setting yourself up for having to pay taxes come tax season rather than getting back a return. (My bro is an accountant and I called him to make sure I had all this straight.)

    Nikki
     

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