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Revenue Form K 4: What You Should Know

It's a question that many families have the answer to, but not many knows why they are being asked to pay it. Why is the 5% withholding tax being withheld for Social Security, Medicare, and Railroad Retirement? The answer is that it is due to income tax withholding requirements. The Social Security part comes from the first 118,500 of a couple's taxable income, and for married taxpayers, that amount is split evenly at 118,500. Married individuals filing separately pay 128,000 of that same percentage on their income, meaning that at 118,500, the spouse is being taxed on 0.33 of their income, which is the difference of 118,500 from the amount withheld by the Social Security Administration. When we think of withholding taxes, we often think of withholding a percentage of income to pay our taxes. But while there are different ways of doing this, there are few things that you can do from your personal financial situation to avoid being taxed on your money. It is also important to know that you should check the tax withholding forms and see if the amount you're being asked to pay is in line with what you may owe. For example, if you're being asked to make a payment at a rate that is slightly above 7%, you would be better off with the 1040NR instead of 1040 because the 1040NR will not be subject to the same taxes at 7%. The Railroad Retirement part comes from payments due on your Railroad Retirement benefits. A couple that has paid railroad retirement is not required to pay the withheld taxes at 5%, but they do have to pay them. The reason the Railroad Retirement is a withholding tax is that the Railroad Retirement benefits have a maximum amount of benefits that people can collect, and the withholding tax is set at 5%. If you think someone is trying to collect Social Security taxes from you, you should call the Social Security Administration at to tell them that you've paid all taxes, and also that you will pay all taxes before the Social Security Administration returns your social security benefits. The Social Security Administration does not have the authority to make that decision. The IRS, which is responsible for collecting the withholding taxes, has the right to make that decision. This blog post was contributed by the Office of Tax Information, Social Security Administration.

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Video instructions and help with filling out and completing Revenue Form K 4

Instructions and Help about Revenue Form K 4

Good morning and welcome to your farm and home show my name is joanna coles and this morning we're visiting with kevin lyons he's the monroe county extension agent for agriculture and natural resources good morning kevin good morning joanna now kevin we get calls at the extension office all the time about farm tax exemption and those type of things but we have something new this year to tell people we do there's a new law that just kind of went into effect i think july 1st of 2022 it was passed about a year ago but it's just like most laws it takes a little lag time for it to take effect but it will take full effect uh january 1st 2022 and it's where farmers and ag producers need to have an ag exemption number in order to always get that sales tax exemption on their purchases that qualify for that all right so in years past they would fill out a form and take that to their retailer but now they have to actually send in a form to the department of revenue right yes they have to uh kind of the initiative has kind of been passed over to the farmer and taken some of the load off for the businesses and the vendors it brings on a little bit more of accountability keeps things streamlined there's been a little bit of issue maybe in the past where there's some confusion on what was exempt and what wasn't exempt and maybe some things got counted it shouldn't have been so they're trying to straighten that up just a little bit is the is the main goal of this uh but it also puts the onus on the farmer to take care of that so they...

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