Tax / Payroll simple question

[debtdewd]

So I'm taking a look at what I've earned in 2011 from my employer and came across a question. I get paid once per month - on the first of each month. So, last December, my typical paycheck deposits on 12/31, a Friday. Getting paid before the 1st is common when the 1st is on a Saturday or Sunday.

My assumption is that if I'm pulling together my 2011 earnings - I start with my paycheck received Feb. 1st, and not what I received Dec. 31st (orig for Jan. 1st). Thoughts?

[jpg7n16]

Why are you manually adding together your paychecks?

You can just wait for a W-2 from the employer, which will have your earnings for the year calculated for you.

[debtdewd]

I understand that I can wait for my W-2, but I want the answer to the question because I'm planning for the remainder of the year and want accurate information on the year to date.

[MonkeyMama]

Yes - you are correct. My boss always pas us 12/31 for tax reasons, though we are paid on the 1st, otherwise.

The date of the check dictates the year it belongs in.

[jpg7n16]

That's what I'm saying - I don't understand what purpose it could have, or what you're planning.

If cashflow planning - timing of historical cashflows doesn't matter, you'd just need to know the timing of upcoming cashflows
If planning for removing a tax refund - you should use prior year W-2
If planning for this year's taxes - you should use this year's W-2, with proper withholdings (based on last year's refund)
If you make so much money it could put you in a different bracket - you should be speaking with your CPA about your specific tax planning
If you're just curious how much you've made this year - it's usually summarized on the top of your paystub as YTD earnings

I have no idea what you're planning for, or why this info could be useful...


But if you insist, since I have to assume you're planning for taxes (since you didn't say what you're planning), then you should double check that the 12/31 paycheck was included in last year's salary on your W-2. If it was, don't count it this year. If it wasn't, then count it this year.

The 12/31 paycheck was likely payment for your work done in December, and they issued on the 31st to keep it in the proper year - but you'll just have to double check (preferrably with your tax preparer).


ETA: or maybe (per MM and DS) I'm just working too hard but that's what I'd do...

[disneysteve]

Originally Posted by MonkeyMama

The date of the check dictates the year it belongs in.

Exactly. What counts is when you are paid. A check on 12/31/10 counts for 2010. Of course, you should already know that since that 12/31 check should have been counted when you did your 2010 taxes a couple of months ago.

[disneysteve]

Also, doesn't your paystub indicate YTD earnings? If so, you can verify that that amount doesn't include the 12/31/10 check.