Simply Junior

Federal income tax is withheld from the pay of almost all employees. Employee pay is inclusive of salaries and wages, bonuses, commissions, and vacation allowances. It is the responsibility of the employer to provide the employee with a W-4 at the onset of their employment. The determination of tax withheld is computed from the information provided on the W-4. The employee must inform the employer of their withholding status (married or single), and the number of exemptions they will be claiming.

Employees also have the option to have an additional amount withheld from their pay. If, over the course of an employee’s employment, they wish to change or adjust their withholding rates, they may simply request to complete a new W-4. Publication 919 “Getting the Right Amount of Tax Withheld” is available from the IRS and can assist employers and employees in making the best choices for withholding correctly.

Factors that will affect the amount of federal income tax withheld from an employees check include marital status, number of exemptions, or an employee has more than one job at a time. These factors will affect federal income tax computations, and should be included in information provided by the employee at the time of employment. Some employees, due to filing status, number of exemptions or allowances, and earned income totals below the national poverty level, will qualify for Advance EIC payments. These are advance payments of a refund of federal income tax. Advance EIC payments are made on the employee’s paycheck each pay period, if requested.

Contributions to qualified 401(k)’s or any other program that allows deductions of “pre-tax” contributions will affect the amount of federal income tax withholding for each pay period. Generally, contributions to a 401(k) or other retirement program are a benefit to the employee at the end of the tax year. These contributions provide a tax break and reduce the amount of federal income tax due, while providing retirement benefits to the employee.

Other factors affecting federal income tax liability are filing status, number of exemptions claimed on your personal tax return, individuals with more than one job, child tax credits, education credits, itemized deductions, and nonwage income.

At the end of the tax year, employees are furnished a W-2. This is a summary of the wages paid and all deductions taken from the employees gross pay over the course of the past tax year. All employers are required by law to furnish employees with a W-2 no later than January 31st of the next tax year.

To summarize, federal income tax withheld from an employee’s pay can be affected by changes to the employees wage base, filing status, or simply the acquiring of a second job. All employees should take the time to review their filing status based on the information provided on their W-4 and make changes to withholding status and exemptions claimed as needed.

It’s questionable whether real estate agents in Ohio bring buyers better prices. The trade group says real estate agents in Ohio bring prices that are 15.4% higher than sellers who don’t use one. But experts note that when real estate agents in Ohio put their own homes on the market, they leave them on for 10 more days and sell them for 3% more than the homes of their clients. The book also purports that real estate agents in Ohio use vague words like “fantastic” and “charming” to describe their clients’ houses, rather than stronger, more specific adjectives, because their primary goal is to persuade homeowners to sell for less than they’d like, and alert buyers that the house can be had for less than the price.

Some experts disputes the notion that real estate agents in Ohio are just out for a quick commission. “Their business relies on their reputation for getting the highest price for their clients,” he says. Experts say that real estate agents in Ohio add value in handling tricky people problems and details that may trip up inexperienced sellers. “A FSBO doesn’t have someone to handle negotiations or find a middle ground when emotions run high,” they say. “The real estate agent in Ohio doesn’t have someone who will tell him what disclosures he needs for his house in his state, or who will keep his house secure by prescreening buyers.”

Although the trade association doesn’t keep track of commission levels, experts say that commission percentages seem to be dropping. In Ohio, where price growth has been positive but not overwhelming, commissions have been running around 6%; in the hot Northeast, they’re running around 4%. “It’s driven by the marketplace,” they say.

Part of what’s pushing down costs is the popularity of flat-fee Ohio brokers and Ohio discount brokers. These give general bare-bones help, rebates, or menu-based options at reduced cost. Most important, many real estate agents in Ohio do what owners can’t do for themselves, which is get the house listed on local multiple listing services. But after that, sellers get a break depending on what aspect of their home’s marketing and sale they want to assume on their own, such as advertising, holding open houses, negotiating, or handling the paperwork.

At least one national broker, Zip Realty, which started in 1999, is relying on a Web-based business model that treats real estate agents in Ohio as employees rather than independent contractors, to help hold down costs. Marketing is somewhat bare-bones, but covers the basics: home advertisements in local newspapers and on real estate Web sites with virtual tours, one open house, one for-sale sign on the lawn, flyers, an e-mail blast to buyers, and coordination of showings. Its rates, however, are typically 1% less than the going rate in an area-for the $690,000 house we talked about earlier, Zip Realty’s commission would be $34,500, 17% less than what an Ohio broker charging a 6% commission would receive. Other discount or flat-fee Ohio brokers include Help-U-Sell and Assist-2-Sell.

But full-service Ohio brokers are doing all they can to keep tight control over the money machine. The National Association of Realtors once proposed a rule that would allow real estate agents to prevent their listings from being displayed on the Web sites of any brokers they chose (meaning discount brokers). But pressure from federal regulators and discount broker members convinced them to withdraw it.

Meanwhile, government antitrust legislators have been looking into industry-backed initiatives that would limit lower-cost options for consumers when dealing with real estate agents in Ohio. Within the last year, a number of those initiatives for dealing with real estate agents in Ohio have passed.