Thanks to readers who emailed! It’s very helpful to get feedback.
To save programmer time, updates for our payroll software will change this year. We’ll make new withholding tables only if they will be used, or if they are easy. We just uploaded the 7 US states with no income tax, plus user requests so far. Users from other states will need to contact us to get 2024 tables. Ditto for Canada. Click here for more info.
Turn-around time won’t be long for custom tables: it takes 20 to 30 minutes to fetch data, enter new numbers, double-check, and update the website. Even quicker if nothing changed this year.
Full-size annual updates for our payroll software are a real chore, and there are three reasons for it. One is just simple math: multiply that prep time by 50 US states + DC + 10 Canada provinces + 3 territories.
Secondly, every year one or two states make big changes that take hours to figure out. Maybe longer. Some tax departments invent amazingly bad ways to calculate withholding. Utah is so weird, it takes a special spreadsheet to convert their numbers. Connecticut added so many tables that we had to skip some of them.
Finally, many states are precise when they should just aim to be accurate.
An example of too much precision: California withholds exactly $115,488.06 per year for a single person making $1 million. Round it to $115,500, and nobody will even notice on their pay stub. Withholding is just an estimate of next year’s payment, anyhow. Our staff must type in and double-check hundreds of numbers each year. Futzing with pennies per million makes it harder. More chance of error by us, tax agencies and users.
Flat taxes are often pushed as a simpler tax system, and every year another state or two switch to them. They are precise and easy: same tax rate for everyone. Problem is, they increase inequality. It’s mostly because of marginal utility. Take 10% of income from a poor person, and they need to give up food, clothing, shelter or health care. Take 10% from a rich person and they can only buy 9 Picassos instead of 10.
Some people who make tax policy and tax tables don’t seem to understand math very well. Seems like a good topic for a future post.
Dennis Kolva
Programming Director
TurtleSoft.com
Dennis,
Thanks for doing the tax tables. Looking forward to the new software.
Thanks
Matt