Tax Filing Situation

[duder2469]

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

I am filing my taxes and found no federal withholdings on my w2. After contacting my employer I was told I was incorrectly assigned a foreign income exemption status. Now my wife and I will owe some money to the irs. When I estimate what my federal withholdings would have been and plug that number into the tax filing it shows a refund of a substantial amount. Do I have any options against my employer? Or any options at all?

 

[davew128]

What is it you think any potential penalty should be for them not withholding money you had all along?

 

[LdiJ]

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

I am filing my taxes and found no federal withholdings on my w2. After contacting my employer I was told I was incorrectly assigned a foreign income exemption status. Now my wife and I will owe some money to the irs. When I estimate what my federal withholdings would have been and plug that number into the tax filing it shows a refund of a substantial amount. Do I have any options against my employer? Or any options at all?

Withholding is basically a deposit against whatever taxes you will owe when you file your tax return. While I am sure that it is very disappointing that you will not be receiving a refund, your employer didn't take any money away from you. You got the money instead of it being deposited towards your taxes. Its also something that you absolutely should have noticed when you got your paychecks.

If the problem is substantial enough that the IRS penalizes you for under withholding, then you might have the argument that your employer should compensate you for the under withholding penalty, but other than that, its honestly your problem.

 

[davew128]

I'd also point out that you should have noticed this as a problem AFTER THE FIRST PAYCHECK.