Johnny, I meant that in the one real-world example (Primary/Secondary filer) 'they' left $2100 on the table.Originally Posted by JohnnyCash
In your your 'John DOH' example, both methods work because the Gross Pay is relatively low. So for the NET PAY method, plug in 75,000 Gross Pay at single-0 withholding: you do NOT receive all of your FITW. You end up 'forfeiting' less than $1000. So depending on your pay grade and withholding exemptions, you may not receive all of the FITW. Which brings me to this point...
You can NEVER redeem all the Gross Pay (including deductions) in lawful money using the NET PAY method. As Doug555 pointed out, I don't believe there is a law that states that you are NOT allowed to redeem the Gross Pay. If there is, someone please provide it if they know of it.
Here's another idea. If people are wary of Doug555's accounting method, i.e. 'adding all W-2 "income" transactions (including SS/Med) to be greater than Gross Pay' (I still need to verify that accounting method with an accountant), then the following might be an alternative to that. And, it actually combines the D555 and Johnny methods, with a twist I have added. The more I think about it, this seems to make lawful and legal sense. Here goes...
1) Create and record at the County, the suggested Affidavit that demands lawful money for ALL transactions and the discharge of all obligations via the 95a(2) language. I believe that Affidavit is linked in the 'Treasury Letter' topic. I don't know the method of linking that here, so I apologize. So you are therefore demanding lawful money on the GROSS PAY and ALL other transactions (including NET, SS/MED, ATM withdrawals, etc), with that Affidavit recording.
2) Now using the 'John DOH' example:
Line 21 has (39250) This is NET pay of 35662 + FITW of 3588.
Line 22 has (2350) This is SS of 1747 + MED of 603.
The refund is still 3588. Even if you plugged in the 75,000 Gross Pay example I mentioned, you would still receive your full FITW refund.
Here's the thought on this alternative (combining D555 with Johnny, and my removing FITW from Line 22 and adding to Line 21):
1) There is no statute or regulation (if there is, PLEASE publish it) that determines HOW to provide for a lawful money DE-DUCTION or RE-DUCTION on the 1040.
2) By including the FITW with NET PAY as "Other Income", you are demanding THAT portion (FITW + NET PAY) of the GROSS PAY in lawful money to be refunded, BECAUSE you were not able to redeem the FITW, UNTIL NOW - on the 1040.
3) This is in fact an 'income tax' matter, is it not? Look at the PAYMENTS section of the 1040. For 2013, what does it tell you to put on Line 62? FEDERAL INCOME TAX WITHHELD (I'm not yelling, just emphasizing). Do you see SS/MED anywhere here (forget the 'excess SS/etc)? No, because it's out of scope for the 1040. The SS/MED amounts are the so-called privilege/contract/taxable-event that incurs an "income" tax...so..
4) IMO the Doug555 example might want to remove the FITW from Line 22. I could say the same for the Johnny example IF he had the 'all transactions' demand Affidavit filed and the D555 'all transactions' language on the checks/slips, where he would then add the FITW to Line 21. If you are redeeming in lawful money in the D555 method, and the NET PAY you received is NOT "income", then how is the FITW considered "income" if you are receiving ALL of it back with the RE-DUCTION from GROSS PAY? If it's NOT SS/MED, then all the other amounts (NET PAY and FITW) are NOT "income" - IF you have demanded that ALL transactions be RILM ...
We KNOW we can't ask for a SS/MED refund on this Form 1040, but we CAN ask for the FITW of which WOULD have been redeemed in lawful money if we were paid in GROSS PAY. Since we are not, then the Affidavit notifies the IRS/Treasury if necessary (not a bad idea to include it with the 1040) that yes, I also have demanded the FITW (and SS/MED) in lawful money. The checks/slips are an extension of the Affidavit (or vice versa, however you want to look at it). So if I have filed my affidavit (and novated the checks/slips with 'all transactions/95a(2)' language), then I know that I can rightfully demand the NON-SS/MED amounts because this is an "income" tax Form. And my "income" in this example is $2350. The remaining (NET + FITW) is not "income" in the statutory taxation sense. Therefore it is removed from the Line 22 "income".
I recognize that BOTH methods have been working and that is great. However, I think the combined method may be viable (removing FITW from Line 22, adding it to Line 21). I'll have a year to think it over. For 2013 and 2014, it'll have to be the Johnny method for my situation.
All thoughts welcome.
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