Tax troubles

[despot101]

Ok my wife got a paycheck the other day from a nursing home she works at. I was looking over the stub and I noticed that she hasn't paid any taxes aside from FICA while working there! Her and I both were shocked, we checked a copy of the w2 form she filled out when she started and she claimed a 0 for allowances. Which should have taken out the max amount. But her employer must have screwed up. Now we are going to get screwed during tax season. She has only worked there part of the year but still earned about $6,000. Is there anything we can do?

I want to strangle the person that does their payroll.

[BrianD]

The first thing I would do is go to the payroll department and make sure that the information from her W-4 has been entered correctly. Also, on the W-4 there is a box that says "Married, but withhold at the single rate". That is usually the best choice.

Two things could have happened: One, they may have accidentally marked her as "exempt" from income taxes, which would have prevented any withholding from coming out. Two, her earnings may have been low enough that no withholdings were necessary. Remember, the tax tables assume that the paycheck is the only income that person has, so if her pay was low enough there may not have been any taxes required to come out, even though come tax time when your and her wages are added together, taxes are due.

In either case, you really don't have any recourse towards the employer. Worst case scenario is you will owe a little bit come tax time, depending on your tax bracket and how much you had taken out from your paycheck. Even if the employer failed to withhold the correct amount, it didn't cost you any money. You are still going to have to pay the same amount of tax, you just didn't "pay as you go" through withholdings as you would have liked to have done.

Brian

[despot101]

Yeah thats all true. It's stupid for them to mess up and us to not notice it for soo long. We are going by there today to see what they have on file and make sure it's setup correctly. She was/is making $11.00 an hour so I doubt she would be exempt. But I know very little about how all that works.

[pnosko]

It may cost you more via a penalty if you "underwithheld" in each quarter. This would be based on all income and withholding on the return.