California’s New Tax Withholding Scheme

The Governator

Effective right after Halloween, November 1st, the citizens of California will be subject to a higher income tax withholding. This will last, at least, until the end of the year. Assuming we all file our taxes correctly (ha!) this will effectively serve as an interest-free loan to the state for the rest of the year. I suppose this is the state government’s alternative to raising taxes, knowing full well that they stand to rake in some money here if/when people get confused about how to file their taxes and subsequently receive less money back. Is that too cynical?

California is raising the withholding rate by 10% on your paycheck. What does this mean for you? The truth is you’ll hardly notice it. But let’s give an example just for fun!

Let’s say you’re single (or dual income married, or married with multiple employers) with zero withholding allowances and your biweekly salary is $1000. That’s equivalent to $52,000 per year. From January 1, 2009 to October 31, 2009 your biweekly paycheck would reflect the state withholding $20.63. From November 1, 2009 through December 31, 2009 your biweekly paychecks will now show the state gouging you out of $22.69!

I guess that’s relatively harmless, right? I guess things could be worse, but let’s just hope that the tax returns we’re expecting don’t come back in the form of IOUs. More food for thought: after three months, you’re out one footlong sandwich from Subway. Think about that…

The government site has a moderately useful FAQ and general 2009 Rates and Withholding details for you to peruse including PDFs of the actual withholding rates.

I think it was a John F. Kennedy that once said: Ask not what your country can do for you, but what you can do for The Terminator.

-RT

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5 Responses to California’s New Tax Withholding Scheme

  1. Leeshie says:

    No sympathy from me. The government takes 22% out of each precious pay check I get. And I only get £300 a mont :( Which is what I’m expecteded to pay rent-wise in December. Boo.

    • RT says:

      If you add both federal and state tax together, I get taxed nearly 35% of my paycheck. And you get free health care. So I wouldn’t be so gloomy if you were you. =)

  2. […] New Tax Withholding Scheme.. Part II. At the heels of RT’s last post “California’s New Tax Withholding Scheme,” I wanted to chime in about a couple of other things I had learned.  I had watched a piece […]

  3. david kralik says:

    I too don’t think this is fair and wanted to let you know that I don’t think its fair, in fact, I launched a petition to stop this and pressure Sacramento to change it now.

    learn more here: http://www.notosacramento.org/

    Thank you.

    -dave

  4. Wassup thumbs up for this entry. It was mega heart felt.

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