I'll find out when my W2 form arrives. But is the amount split between the years of a weekly paycheck when the new year falls in mid week? The pay stub still says for the week of 12-28-2014 to 01-03-2015, pay date 01-09-2015. In other words will the amount earned in the last week of 2014 go to 2014 earnings or will it be combined with the 2015 earnings since its part of the 2015 pay period?

 

It goes by the date of the check. If a check dated today includes pay and deductions for hours that you worked in 2014, they apply to 2015.

 

So in theory if one works for a whole year but does not receive the income for that year but instaed during the following year, there would be no income tax for that work period during the year worked? The tax would be paid the following year. So regardless of when it was earned, tax is only collected for time it is received. Correct? Withholding tax notwithstanding!

 

Your W2 will show only for the year worked. I'm kinda confused by your question...but thats the way it works.

 

I'm sure that there are some unique exceptions, but, in general, income tax is based on your actual income, and you have no actual income until the date that your employer actually pays you. On the date of that check, regardless of when or even if you cash it, you have been paid, and you become responsible for taxes related to that amount. Your agreement with your employer regarding the terms of your compensation, again, in general anyway, is irrelevant. Now, as with many situations, I imagine that there are laws in place that prohibit an employee or employer from "manipulating the system" for personal gain.

 

The system does get manipulated some. Many companies will rush to get their billing out at the end of the year and on the reverse try to pay out a lot at the end of the year. It pretty much boils down to what the accountant says. Employee pay normally follows a preset schedule.

An employee's pay goes by the date the check was wrote although a business doesn't claim income until it's received. I've completed jobs and billed in one year but because I didn't receive payment until after the 1st of the year, my expenses were for the previous year and the income became part of the new year. Your yearly pay ended at the end of the last pay period for last year. Any pay you received this year [even though it's for work done last month] goes towards next year's total.