Bean Counter Bookkeeping

Are you a small business owner in Arizona?  There has been a big tax change in the way State Withholding is calculated.  If you recall the old A-4 form had percentages to choose from like 21% or 32.5%.  Now the numbers are much lower.

Here is how it works: Prior to July 1, 2010 the state witholding tax was a percentage of your Federal Withholding.  So if you checked the box 32.5% then that percentage was multiplied by the amount of Federal Withholding taken out of your check to arrive at your State Withholding. 

Now, the percentage you choose will be directly multiplied by your Gross Wages.  For example:  If you make $1000 a week and you check the box 5.1% as your withholding then your State Withholding for you weekly paycheck will be $51 ($1000 x 5.1%). 

It is super easy now to figure out how much you will be putting in for the year.  I like it

~Elizabeth

For more information or forms visit www.aztaxes.gov