Employer screwed up

[koster]

What is the name of your state (only U.S. law)? Kansas

Please help!

I got my husbands W-2 the other day and when I sat down to file our taxes I noticed the box for the federal withholding was 0. I knew that had to be wrong so I found his last pay stub of 2008 and sure enough there was federal taxes taken out. So I called his HR dept. (which happens to be a call center) and finally after calling them again today they tell me that no federal taxes were taken out all year. See a while back we were having trouble making ends meet so we both went to claiming exempt for a few months to have a little extra cash. After that we both went back to claiming 0 exemptions. I filled out his W-4 and he brought it to work, I even called them to make sure it went through. (we had this problem the year before) So now they tell me that they see where the exemptions was changed from exempt to 0 but for some reason the payroll system didn't actually take the taxes out of his check. So now we are going to owe quite a bit of money. Is there something that can be done about it. I know we should of checked his stubs throughout the year, but to my defense, they stopped sending W-2's around August, and went to an online system. And on top of that, the line on his stubs is not called federal, (like normal check stubs show) its some weird name like FICA HI or LOW or something. So its not really like we would of known they weren't taking it out. I am so upset, I understand we are the taxpayers and its our responsibility to pay the taxes. But can they not get in trouble for not having a system that works?

Also, is it legal for them to not pay overtime wages if he has a holiday in that period. Meaning the overtime he worked will go to make up the holiday even if they pay for the holiday.

Any advise would be appreciated.

[FlyingRon]

FICA is not income tax, it's the social secuirty tax and would be much less than even normal withholding with several exemptions declared. It's also the case that you weren't allowed (nor should any sane employer) permitted you to switch to EXEMPT like that. EXEMPT is only for people who didn't have last year and don't expect to have tax liability this year.

It's up to you to make sure you're not underwithheld not anybody else.
The system most likely would have worked if you hadn't been cheating.

The nature of the holiday and overtime depends on just what his employment arrangement is.

[koster]

Originally Posted by FlyingRon

FICA is not income tax, it's the social secuirty tax and would be much less than even normal withholding with several exemptions declared. It's also the case that you weren't allowed (nor should any sane employer) permitted you to switch to EXEMPT like that. EXEMPT is only for people who didn't have last year and don't expect to have tax liability this year.

It's up to you to make sure you're not underwithheld not anybody else.
The system most likely would have worked if you hadn't been cheating.

The nature of the holiday and overtime depends on just what his employment arrangement is.

Not that I need to explain myself to you, but we got married last year, and the year before that both him and I had no tax liability and did not realize how much of a jump it would be on our taxes when we got married. (Its not like we sat down thinking hmmmm, I wonder what this will do to our taxes if we get married) So therefore we were not trying to CHEAT the system. And it would NOT of worked because they confirmed to me it was entered into the system to change it back to 0 but THEIR system did not take out taxes. And I didn't realize that we needed to check every check stub every week to make sure his large business company with over 2500 employees world wide didn't have a payroll and tax system that worked.

So unless you have useful information for me, I would rather not waste my time any longer.

[LdiJ]

Originally Posted by koster

Not that I need to explain myself to you, but we got married last year, and the year before that both him and I had no tax liability and did not realize how much of a jump it would be on our taxes when we got married. (Its not like we sat down thinking hmmmm, I wonder what this will do to our taxes if we get married) So therefore we were not trying to CHEAT the system. And it would NOT of worked because they confirmed to me it was entered into the system to change it back to 0 but THEIR system did not take out taxes. And I didn't realize that we needed to check every check stub every week to make sure his large business company with over 2500 employees world wide didn't have a payroll and tax system that worked.

So unless you have useful information for me, I would rather not waste my time any longer.

The reality of things is that you should not have changed your withholding to exempt, even temporarily (and your employer should not have allowed you to do so). The whole problem is a direct result of that.

Also, any withholding that indicates "FICA" is NOT federal income tax withholding. Its either Social Security or Medicare withholding (with old fashioned terminology). You cannot exempt yourself out of that.

There is nothing that you can do to hold the employer responsible for this. Even if the employer made the mistake your husband got the full amount of money that was due to him, it just ended up in his pocket instead of being withheld for federal income tax.

In future, you need to understand that you cannot play around with your exemptions without consequences. fill out W4s putting your exemptions where they should be, and set up an installment agreement with the IRS to cover your errors for 2008.

[tranquility]

I hate payroll. Mistakes are sometimes difficult to track down, but everyone always knows. When I first did payroll, a grizzled old accountant told me a bit of wisdom:
"Don't screw up, no other work you do will ever be audited every week." (We paid weekly.)

What he meant was that everyone looks at their check and the deductions each time they get it. If they don't understand, they ask.

Clearly, the OP participated in playing games. Those games were certainly reflected on the bottom line and the OP knew of them. Sorry I can't give warm fuzzies on this one, but you knew what you were doing.

Now, pay the piper.

[irsos]

Originally Posted by koster

What is the name of your state (only U.S. law)? Kansas

Please help!

I got my husbands W-2 the other day and when I sat down to file our taxes I noticed the box for the federal withholding was 0. I knew that had to be wrong so I found his last pay stub of 2008 and sure enough there was federal taxes taken out. So I called his HR dept. (which happens to be a call center) and finally after calling them again today they tell me that no federal taxes were taken out all year. See a while back we were having trouble making ends meet so we both went to claiming exempt for a few months to have a little extra cash. After that we both went back to claiming 0 exemptions. I filled out his W-4 and he brought it to work, I even called them to make sure it went through. (we had this problem the year before) So now they tell me that they see where the exemptions was changed from exempt to 0 but for some reason the payroll system didn't actually take the taxes out of his check. So now we are going to owe quite a bit of money. Is there something that can be done about it. I know we should of checked his stubs throughout the year, but to my defense, they stopped sending W-2's around August, and went to an online system. And on top of that, the line on his stubs is not called federal, (like normal check stubs show) its some weird name like FICA HI or LOW or something. So its not really like we would of known they weren't taking it out. I am so upset, I understand we are the taxpayers and its our responsibility to pay the taxes. But can they not get in trouble for not having a system that works?

Also, is it legal for them to not pay overtime wages if he has a holiday in that period. Meaning the overtime he worked will go to make up the holiday even if they pay for the holiday.

Any advise would be appreciated.

I never believe posters when they say they did not notice this or that on their check. This is because I have seen too many times when a guy who can barely dress himself notices he only was paid for 80 hours instead of 80.15 hours or that his check was $0.52 short of what it normally is. If you feel like you are being treated unfairly here, it is because many of us think you are being disingenuous, to be polite about it.

[CourtClerk]

Originally Posted by irsos

I never believe posters when they say they did not notice this or that on their check. This is because I have seen too many times when a guy who can barely dress himself notices he only was paid for 80 hours instead of 80.15 hours or that his check was $0.52 short of what it normally is.

Oh how very true this is!!!!!

[anteater]

Not that I need to explain myself to you, but we got married last year, and the year before that both him and I had no tax liability and did not realize how much of a jump it would be on our taxes when we got married.

Just so you understand...

"No tax liability" does not mean that you did not owe taxes above the amount withheld.

It literally means that the line on the 1040 that says "This is your total tax" is $0.

[LdiJ]

Originally Posted by irsos

I never believe posters when they say they did not notice this or that on their check. This is because I have seen too many times when a guy who can barely dress himself notices he only was paid for 80 hours instead of 80.15 hours or that his check was $0.52 short of what it normally is. If you feel like you are being treated unfairly here, it is because many of us think you are being disingenuous, to be polite about it.

In this instance I completely agree with you. They went exempt for a while, and then changed back to zero exemptions. Its should have been glaringly obvious that the net checks didn't change when he filed the new W4.

However, there are some instances where someone might not grasp what is happening, particularly if their pay is not a fixed amount per period...varying hours...varying overtime...etc.

[davew128]

Originally Posted by tranquility

I hate payroll.

I won't do it because it's a losing proposition as a business service.

I hate dealing with it on an outside basis because even the top name payroll companies hire people that know squat about payroll tax law. When I have to explain to a payroll person how to do their job, there's a problem. However I do recognize that it must be the most miserable data entry job to have.

[loriann7]

I do payroll in my state! If you all hate payroll try certified payroll sometimes! ALL The rules fly out the window with an entirely new set of rules and regulations! .

To the poster: While you made a mistake last year, so did your employer's payroll system. Kindly ask HR to get you the information you need to report your taxes. By law (at least here in NY) they have to provide correct W2s.