https://www.ncsecu.org/PDF/Grassroots/GR_0913.pdf#3

For the typical person this looks fantastic.

Two notable items:

• The three-tiered tax rate system of 6%, 7% and 7.75% will be replaced by a single flat rate of 5.8% for the 2014 tax year and 5.75% in 2015 and thereafter.

• The standard deduction will increase to $7,500 for individuals, $12,000 for those filing as Head of Household, and $15,000 for joint filers; however, personal exemptions are eliminated.

9/14/2013 11:14:52 AM

This thread is relevant to my interests. I'd be curious to hear about situations where this might be worse for the taxpayer (more $ owed). It appears like what this actually does is dramatically decrease the taxes paid by higher income earners, while removing deductions and credits that you normally couldn't take anyway if you have a relatively high income.

Also: " The standard deduction will increase to $7,500 for individuals, $12,000 for those filing as Head of Household, and $15,000 for joint filers". Anyone know what this is increased from? I did enjoy my $500 childcare credit last year, and if the increase in standard deduction for joint filers is pretty low, I could see how that might be worse off for me.

Found a post on a Fayetteville Observer comment: "For a married couple filing jointly the deduction goes from $6000 now to $15000." That is pretty significant. I'm not sure what my typical NC tax rate is. Am I oversimplifying it by multiplying $9k by that rate and saying I'm saving that much in taxes owed?

[Edited on September 14, 2013 at 10:13 PM. Reason : ]

[Edited on September 14, 2013 at 10:19 PM. Reason : ]

9/14/2013 10:13:04 PM

Quote :

"Anyone know what this is increased from?"

Quote :

"The North Carolina standard deduction for taxpayers filing: Single is $3,000 Married filing jointly or qualifying widow(er) is 6,000 Married filing separately is 3,000 Head of household is 4,400"

http://www.dor.state.nc.us/taxes/individual/400standard.html

[Edited on September 15, 2013 at 3:40 AM. Reason : ]

9/15/2013 3:40:07 AM

I crunched a bunch of numbers last night in Excel, didn't account for many tax credits other than the childcare credit.

If a family made $30k, they will save something like $100-200, $100k = ~$1000, $400k = ~$10,000.

Probably missing a lot in terms of other deductions.

9/15/2013 8:38:00 AM

Quote :

"I crunched a bunch of numbers last night in Excel, didn't account for many tax credits other than the childcare credit. If a family made $30k, they will save something like $100-200, $100k = ~$1000, $400k = ~$10,000"

That's what I found also. The key is to make $texas and don't have kids. If you have a basketball team, you're pretty much screwed regardless of income.

9/15/2013 1:05:52 PM

bttt...

our HR department just sent out the new forms and if I am reading this right filing as Single you are no longer allowed, by law, to claim yourself. Is that correct?

For the last few years i've always filed as Single and 1. it seems like they are really trying to prohibit this on the new NC-4EZ form. So I guess I am forced to now file as Single and 0?

Can someone clear this up for me?

12/12/2013 3:30:05 PM

That is correct, and the form is new and more involved if you can't use the EZ.

Has anyone done the math to know if this will mean a bigger paycheck or smaller one? If a single person is making $75k, will their paycheck get bigger or smaller?

12/12/2013 3:38:22 PM

Tax rate goes down to 5.8%, my check will be smaller because I just realized they were only taking 4.4% out of my check haha

12/12/2013 3:42:49 PM

This thread makes me realize I've never seen or done any of these forms for SC since I've lived here. Just the federal.

12/12/2013 3:43:18 PM

The lack of "NC" in the title had me thinking federal income taxes, and I was all like how the hell did I miss that in the news???

12/12/2013 3:59:38 PM

Quote :

"bttt... our HR department just sent out the new forms and if I am reading this right filing as Single you are no longer allowed, by law, to claim yourself. Is that correct? For the last few years i've always filed as Single and 1. it seems like they are really trying to prohibit this on the new NC-4EZ form. So I guess I am forced to now file as Single and 0? Can someone clear this up for me?"

yeah... even having one kid i can only claim 0

12/12/2013 4:01:02 PM

Quote :

"yeah... even having one kid i can only claim 0"

It's built into the Standard Deduction now which is why you could pay more if you're trying to have a basketball team since the deduction is capped based on your filing status.

Quote :

"Has anyone done the math to know if this will mean a bigger paycheck or smaller one? If a single person is making $75k, will their paycheck get bigger or smaller?"

Assuming that my math is correct and the person isn't itemizing and has no 401k contributions, etc:
Old: $4848
New: $3915
Savings: $933

12/12/2013 4:27:36 PM

Remember, this is a tax neutral change. They are going to make up the revenue in other places. You may get back more in taxes, but I am positive your overall 'win' is going to be less than expected.

12/12/2013 4:47:48 PM

^^ i'm talking about a bi-weekly paycheck, if it would be bigger or smaller for a single person making about $75k who can no longer take a deduction for themselves. I'm curious if the tax savings offset the loss of withholding deduction.

anyone done the math?

12/12/2013 4:58:34 PM

Quote :

"The lack of "NC" in the title had me thinking federal income taxes, and I was all like how the hell did I miss that in the news???"

same here - took me a bit to realize they were just talking about NC.

12/12/2013 5:27:34 PM

^^a couple bucks more.

There are tax tables published... Nc30 maybe? Generally speaking the single, 0 filers will be better off. My withholding is going down by about $10 per biweekly paycheck.

Edit: yes, NC-30... http://www.dornc.com/downloads/nc30.pdf . Find your check amount and check against your exemptions number. Pay frequency is listed...

[Edited on December 12, 2013 at 6:04 PM. Reason : .]

Ummm, actually its about $30 per check, after factoring in what my actual taxable wages are (and figuring salary and benefits costs are the same). Not an insignificant amount

[Edited on December 12, 2013 at 6:26 PM. Reason : .]

12/12/2013 6:01:52 PM

Quote :

"^^ i'm talking about a bi-weekly paycheck, if it would be bigger or smaller for a single person making about $75k who can no longer take a deduction for themselves. I'm curious if the tax savings offset the loss of withholding deduction."

The personal exemption for a single person ($2000 @ $75k/yr) would be negated by the standard deduction increasing from $3000 in 2013 to $7500 for 2014. As for exact number, it doesn't look too difficult to figure out. Assuming 1 exemption for 2013 and 0 for 2014, $186 would be withheld now and $150 in 2014. You'd end up owing $12 in 2013 and $15 in 2014 at tax time with those numbers.

2013 Withholding Info- http://www.dornc.com/downloads/nc30_2013.pdf
2014 Withholding Info- http://dornc.com/downloads/nc30.pdf

12/12/2013 6:26:29 PM

thanks for the links!

12/13/2013 8:35:49 AM

Does everyone have to fill out a new withholding form?

12/13/2013 8:48:45 AM

I think so or it will default to 0 (that's how it's working for my job anyway)

12/13/2013 8:55:57 AM

yeah, your employer is technically supposed to change yours to single/zero if you don't complete a new one.

12/13/2013 9:02:46 AM

^change technically to legally obligated.

Each exemption you claim is for $2500 of income... Which is roughly $154 of withholding saved. So, if you think you'll have an exemption, but aren't positive, and don't feel like doing the paper work... You'll only miss $154/exemption in your pocket through the year, and collect at refund time.

12/13/2013 9:57:48 AM

Quote :

"yeah, your employer is technically supposed to change yours to single/zero if you don't complete a new one."

you are actually supposed to do that yourself, your employer is supposed to make you fill out a new form

12/13/2013 10:08:30 AM

EZ withholding form: http://www.dornc.com/downloads/nc4ez.pdf

The full/worksheet edition: http://www.dornc.com/downloads/nc4.pdf

12/13/2013 10:12:53 AM

^^ yeah that's what I said...

Quote :

"If an employee fails to provide the employer with the applicable updated form(s), the employer is required to withhold North Carolina tax based on the following status: • Employees failing to file Form NC-4 EZ or Form NC-4: “Single” with no allowances"

Quote :

"^change technically to legally obligated."

more appropriate wording. "technically" still works tho

[Edited on December 13, 2013 at 10:55 AM. Reason : .]

12/13/2013 10:47:36 AM

I feel like it would be easier for everyone involved if HR departments told people not to submit the form if they're gonna be at the default anyway.

Come on, let's make this really EZ!

12/13/2013 10:56:12 AM

Married people don't want to withhold at single though.

12/13/2013 10:58:16 AM

Maybe I'm reading it wrong, so correct me please - the caution on the form states that if you provide an allowance certificate "that contains information which has no reasonable basis and results in a lesser amount of tax withheld than would have been withheld had you furnished reasonable information, you are subject to a penalty of 50% of the amount not properly withheld."

Usually I can figure out legalese but that just makes me head hurt. That basically means, just like the IRS does, if you claim a lot of allowances without a reasonable basis (what essentially used to be exemption by person but now is based off various itemized financials) and your employer then only takes a little bit out of your paycheck instead of the normal amount, you not only are going to have to owe the the NCDOR your normal difference in the taxes you owe during tax time but also an additional 50% of that difference. Is that right?

I assume that clause is essentially there so people dont keep way more than they should from their job then run off with the money, otherwise if they filed taxes normally and correctly they'd be hit with the difference please penalty. Lastly, that means you cant go wrong (as far as penalties go) by leaving/claiming zero allowances/withholding, correct?

[Edited on December 13, 2013 at 11:23 AM. Reason : landmines, it was landmines]

12/13/2013 11:14:08 AM

^correct. It basically means don't claim exemptions without merit, or be subject to penalty of 50% of the difference.

^^i *think* married with two incomes both exemptions are factored in (each earner gets their personal exemption)... You won't see a difference from a single person. Married with one income will need to use the itemized nc-4 to determine the correct amount of exemptions.

[Edited on December 13, 2013 at 12:16 PM. Reason : .]

12/13/2013 12:16:26 PM

can someone just link a calculator that shows how much more/less i'll have to pay

12/13/2013 12:32:42 PM

Quote :

"aimorris: Married people don't want to withhold at single though."

Then do the form.

I'm saying, if you're just gonna put single/zero, it would be much easier to not submit anything.

You follow?

12/13/2013 12:44:06 PM

^^ use the nc-30 that was linked. Its not that hard.

12/13/2013 12:54:13 PM

^^that's how they are doing it at my job.

12/13/2013 1:08:34 PM

Quote :

"can someone just link a calculator that shows how much more/less i'll have to pay"

Spreadsheet I've been playing around with. Pretty basic but should give an idea of the difference assuming you know your expected adjusted gross income. (also assumes that my math is correct)

https://dl.dropboxusercontent.com/u/11278312/2014_NC-D400.xls

12/13/2013 1:25:34 PM

On my new form I claimed married filing jointly and zero even though we have two kids and could have filed 1. My wife did the same and a lady that her school system (she is a teacher) brought in from H&R Block said that we both cannot file the NC4 as married filing jointly and that one of us should have selected single. Can anyone shed light on this? When it comes to taxes, I really don't like owing anything so I'll usually claim 0 regardless.

12/14/2013 4:52:12 AM

Unless I'm misreading the withholding instructions, it shouldn't matter as it looks like they're using the same table/formula for Single and Married. Previously they were separate but it looks like Head of Household is the only one that has a different calculation for 2014. It does say that if you're filing Married, only one person should claim the allowance for the child on their withholding but that's all I see.

12/14/2013 8:36:40 AM