Asking employeer to take off more taxes - how much more?

[Caliza]

So, I was in the unfortunate situation of owing money on my taxes this year. In 2011, for the first 4 months of the year (winter semester) I was in school full time.
I had a part time job that I started in April 2011 (I still have this job now), plus had a few contracts in the government (one from April-September and one from late October to the end of December).

My dads accountant said that the main reason I ended up owing was probably because I was mostly working on a contract basis, and no one job ever took off quite enough. However I also know that my part time job took off the *bare minimum* in taxes, and that a number of my co-workers were in the same boat as me.

I don't want to be in this position again next year, and I am thinking of asking them to take off more taxes going forward, I'm just not sure how to go about figuring out how much I should be asking them to take off. Also, my current government contract will be done soon, making the part time job my promary source of income until something else comes up - so I need to make sure I have enough money to live on too.

thanks!

[lekate]

I'm sort of in the same boat, I did two pt jobs last year and both took off the bare min. and I worked overtime at both to meet 40 hours and above (worked hard to pay off debt, some months I was up to 60 hours per week), in anycase, I got screwed over since my taxes were based on a lower income level than I ended up in (so much for working extra).

I don't know what you should do, but ask for maybe the 'step' above what they have you at now?

[Natalka]

Gee, it seems that the credits you would have gotten for being a student would get you enough credit to get tax money back...

My son is 20, worked full time from January til the end of July, then was in college full time from August to December. Through the year he also had a part-time job for which they took off no taxes, but it was usually only three hours per week.

He's getting over 1,500 back (!), which is comparable to what his friends in school are getting, too. We're in SK, but I can't see things varying that much from province to province, however I don't know.

Since your work is still not stable at full time, I think it's better to just let the employer take off what they usually do, and put aside money yourself in case this happens again next year.

[i_forget]

You just need to go in and ask them to increase the amount of income tax that they deduct from source. You may have to fill out another source deductions form (the form you filled out when you first got the job). Just takes a couple of minutes.

You can go to the CRA website and there is a button for PAYROLL. Click on it and find the online calculator. Input your information (weekly, biweekly, province, date) and then input your gross earning from both sources of income to find out what the total taxes should be for both jobs, then figure out what the difference is between that and what you are currently paying, and have your employer make an adjustment for the difference.

[ashedfc]

You just need to go in and ask them to increase the amount of income tax that they deduct from source. You may have to fill out another source deductions form (the form you filled out when you first got the job). Just takes a couple of minutes.

You can go to the CRA website and there is a button for PAYROLL. Click on it and find the online calculator. Input your information (weekly, biweekly, province, date) and then input your gross earning from both sources of income to find out what the total taxes should be for both jobs, then figure out what the difference is between that and what you are currently paying, and have your employer make an adjustment for the difference.

That difference figure doesn't accounts for any credit's you may be eligible for..
& Why tell your employer to deduct more.. I would say, take more pay from the employer & set-up a TFSA account at your bank (contributing whatever amount you wanted them to deduct your pay period monthly/biweekly/weekly). Come tax time, if required you can withdraw from TFSA & give it to CRA

[FallenPixels]

If you are working for two employers, have one use the tax free threshold and the second tax you on the full amount, I wouldn't have any 'extra' taxes taken off unless that is something you have agreed to do for repayment of backtaxes - just set up the thresholds correctly

I am not sure what Province you are in, but the form you need for your employer (which they should have) is here: http://www.cra-arc.gc.ca/formspubs/frms/td1-eng.html (use the top one for your prov), put $0 in the TOTAL CLAIM AMOUNT box and give it to HR

[i_forget]

That difference figure doesn't accounts for any credit's you may be eligible for..
& Why tell your employer to deduct more.. I would say, take more pay from the employer & set-up a TFSA account at your bank (contributing whatever amount you wanted them to deduct your pay period monthly/biweekly/weekly). Come tax time, if required you can withdraw from TFSA & give it to CRA

Or listen to Ash (which is probably a much better idea than having more deducted) there are a lot of options. It may be an idea to look over your taxes to make sure that they were done properly as well. You should have had deductions for tuition, books, personal credits, working credits.....I worked full time when I went to school and I always got tax refunds.

[FallenPixels]

Ash's idea only works if you are willing to leave the money alone

[jayne_a]

If you owed $1000, i would take that and divide it by 26 paychecks a years $38.46 so i would ask your boss to take off an extra $40. I owed one year so i ask my boss to take $50 off extra every check. the next year I got money back. Hope this helps.

[xox2010]

Gee, it seems that the credits you would have gotten for being a student would get you enough credit to get tax money back...

My son is 20, worked full time from January til the end of July, then was in college full time from August to December. Through the year he also had a part-time job for which they took off no taxes, but it was usually only three hours per week.

He's getting over 1,500 back (!), which is comparable to what his friends in school are getting, too. We're in SK, but I can't see things varying that much from province to province, however I don't know.

Since your work is still not stable at full time, I think it's better to just let the employer take off what they usually do, and put aside money yourself in case this happens again next year.

Sorry OP.. going off topic a bit. Natalka, so did your son not have an option to carry forward tuition expenses? I carried mine forward and only got back like $30. I was in school full time for all of last year (literally January - December, including the summer) and I thought I would get back money for all of the tuition I paid plus my textbooks.
It may be because I carried it forward, but even when I selected to not carry it forward I still didn't get any money back for it. Does anyone know why? Thanks.

[smileyKT]

Not too sure, so correct me if I'm wrong, but I did my taxes this year and I am also a full-time student (Sept-Apr). The tuition counts as non-refundable tax credits. This means that if you DID owe the government, the credits can be used to reduce what is payable. What you don't use will be carried on to next year, and so forth.

Sorry OP.. going off topic a bit. Natalka, so did your son not have an option to carry forward tuition expenses? I carried mine forward and only got back like $30. I was in school full time for all of last year (literally January - December, including the summer) and I thought I would get back money for all of the tuition I paid plus my textbooks.
It may be because I carried it forward, but even when I selected to not carry it forward I still didn't get any money back for it. Does anyone know why? Thanks.

[Natalka]

We didn't use the carry-forward option, nor did we transfer it to us (parents). We felt he needed the money, since he will need it for tools, etc. as he starts his apprenticeship (once he starts, he'll have a tools deduction, as well as others such as the graduate retention program - for next year's taxes).

It's the combination of the federal tax credits - for the tuition, an amount per month which you are in school, and an amount for textbooks. Our SK credits include the tuition, and the amount per month.

[Gsxrboy]

I don't agree with asking your employers to take more money off your pay cheque. The reason being is they money that the government holds onto isn't making any money via interest payments. You are much better off simply opening an RRSP and contributing a set amount each month, this way you are earning interest and come tax time you will either owe way less or get a nice return which for the young people can be used for anything you like or towards your RRSP's again.

[Ciel]

So, I was in the unfortunate situation of owing money on my taxes this year. In 2011, for the first 4 months of the year (winter semester) I was in school full time.

I had a part time job that I started in April 2011 (I still have this job now), plus had a few contracts in the government (one from April-September and one from late October to the end of December).

My dads accountant said that the main reason I ended up owing was probably because I was mostly working on a contract basis, and no one job ever took off quite enough. However I also know that my part time job took off the *bare minimum* in taxes, and that a number of my co-workers were in the same boat as me.

I don't want to be in this position again next year, and I am thinking of asking them to take off more taxes going forward, I'm just not sure how to go about figuring out how much I should be asking them to take off. Also, my current government contract will be done soon, making the part time job my promary source of income until something else comes up - so I need to make sure I have enough money to live on too.

thanks!

Treat your regular part-time job as the main one-you might want to ensure this by having a TD1 form (on CRA site) completed for this year indicating that you are claiming personal tax credits, thus exempting the first $3500 in income from CPP contributions (assuming you are an adult).

For all other jobs-when you get the job through temporary agency or directly with employer,ask them for a TD1 form and indicate you are *NOT* claiming exemptions, so all income earned at the other jobs get source deductions (CPP, EI, income tax plus anything else that might relate to work like uniform charge or whatever) taken off each pay period.

I'd recommend that you check with the person doing your payroll at the regular part-time job to just verify what the province for tax is checked off on your record. Should two provinces be checked off, you might have noticed no income tax taken off-it happened to me and I had to get a temp. job to generate the money for the tax bill owing.

Technically, every employer is supposed to provide new hires with a TD1 form (and if your personal situation changes i.e. have a spouse, kids come along, then you should revisit the TD1 form and update or do a new one and have payroll/accounting update the changes to take effect for next pay period). Since you are a SCer, you can bring up the topic yourself. Not everyone who hires has a clue about the form.

If the paperwork trail is too much, then follow the suggestion to set aside money every pay period in your account or TFSA. I understand one bank offers a program that debits a set amount to your savings account everytime you use your debit card (Scotiabank).