Taxes

L1: TaxesI have a friend who does his own investing. He takes 3660.00 per month as a net amount of check. His CPA had him set up to take out his Fed taxes at the end of the year. His State taxes are paid by check to him end of year also. Somehow those taxes are not the same. Here are the amount, any help would really be great.
2000 Fed 5834 State 1400 Income 3660×12=43920
2001 Fed 4077 State 1300 Income 3660×12=43920
2002Fed 4778 State ? Income 3660×12=43920
You can see the Totals are: 2000=51154 2001=49297 2002=48697 so far less State to pay2002-12-05 12:08, By: westman, IP: [127.0.0.1]

L2: TaxesBest advice is to have your friend ask another CPA that can look at all the facts or merely have his/her CPA give an explanation.
2002-12-06 09:29, By: Gfw, IP: [127.0.0.1]

L2: TaxesThanks for the reply, I advised him to make an appointment..rephrasing the question a little would help me also….Does changing the taxes withdrawn “change” the SEP as far as the IRS is concerned? For the past three years, he has never changed the “net” amount to himself.
Thanks again2002-12-06 13:42, By: westman, IP: [127.0.0.1]

L2: TaxesPlease us ethe post reply button unless you are starting a new discussion. Thanks.
This is one time the IRS doesn”t care about taxes – they only look at the gross distribution amount to determine “substantially equal”. But, as always, they will get their share.
2002-12-06 14:06, By: Gfw, IP: [127.0.0.1]