Expert: Shirley McAllister, CPP, PHR - 6/1/2011

Question
On a 5 month back pension I received 7740.00 gross and was paid 7253.82 at what percent did they take out the taxes.. Also on the paper work for tax deductions I stated  Married with no dependents.  I thought I had figured around 20% to include Federal
and State (California).. but doesn't seem like they took enough out.. Need to know if I should change something..

Answer
I need a bit more information. Was the pension for 1 month or for 5 months? They only took out about 6.28 per cent which is not much.

20% of 7740 is 1548.00 they only took out 486.18.

Does not sound right to me. It is definitely not being taken out on Married and zero dependents.

I do think a mistake has been made on the amount of taxes taken out. You might need to put some back to pay taxes at the end of the year.

Perhaps they spread it out over 5 months if the pension was for 5 months and the taxes would be less, but that is not much at all.

If you will be receiving this pension I would check the next one and see how much is withheld. If the amount is again too low you need to contact whomever is paying the pension and make sure they have the correct information for taxes on file. Sometimes paperwork is entered incorrectly by employees in error. You need to have it corrected now before you owe too much to the government.


Shirley