My Employer did not withold enough from my W2, what do I do?

Question

Basically at one of my jobs (I had 3 last year), I earned roughly 3,300, but only about $44 was witheld. Normally this wouldn't be a problem, but I made about $21,000 last year. Needless to say I am going to have to pay a lot more now in taxes because it seems that they did not withold enough. I called them and they said I had only selected "1" on my W4 meaning single and unmarried, so its a mystery to me why so little was witheld. Then again I'm not an expert on taxes by any means. Is there anything I can do about this or do I have to just bite the bullet?

Answer 1

if you didnt not earn enough in each individual pay period, then less would be taken out,,,, would that possibly of happened? most businesses use a chart, and according to your dependents selected, withhold that amount,,,, they wouldnt have a way of knowing what other income you have,,,,,, so if your paycheck is only around the $400 or so point, that is minimum wage level, and almost nothing is taken out,,,,

Answer 2

This time around, you have to bite the bullet. It's a hard lesson I learned pretty much the same way myself years ago when I first started working: the "standard" amount withheld per your selection is often not enough come tax time, even if you made the appropriate selection on your W4.

I'd recommend reviewing the selection(s) you made for your current job(s). As a single person with no children, you can claim 1 dependant (yourself) on your W4, but you've seen what happens when you do that. In the same situation, I not only claimed zero dependants, but elected to have an additional flat amount deducted from my paycheck for taxes. I see a little less in each paycheck, but I've not owed the IRS since, and I always get something back.

Some people may argue that you lose the interest earned on that extra cash throughout the year, but only you know your finances. If you tend to save more than you spend, and you can write a check to cover your tax bill at the end of the year, the interest earned might be worth paying at the end of the year.

Answer 3

Both the IRS and your employer hold you responsible for making decisions about what to claim on your form W4. Throughout the year you had an opportunity to see how much Federal Income Tax (FIT) was being withheld from your check simply by looking at your paystub. You either didn't bother to look, or did nothing to correct the low tax. You employer is NOT liable for your tax decisions.

Single with 0 exemptions is the highest tax rate of all the different combinations the IRS allows. You claimed Single with 1 exemption, the 2nd highest tax rate. The higher the exemption - 1,2,3, 4 5 etc - number the lower the tax rate. The lower the exemption number, the higher the rate, with 0 being highest.

In addition to the filing status of Single and an exemption of 0, you also have the option of having an additional amount taken out for FIT. It's right on the W4 form.

Lastly, as to why so little tax was taken out of your pay, even though you selected the 2nd highest tax rate - all modern payroll systems calculate tax using the IRS approved Annualized Tax Calculation Method. The computer takes your pay and multiplies it by the number of pay periods in the year, then calculates the full year tax based on your S/1 status, then divides by the number of pay periods in the year to arrive at your per-pay tax amount. The payroll system doesn't know you are holding down 3 jobs. So it thinks you are living on $3,300 a year, and at that low income amount, you were lucky to have even $44 withheld from your pay.

At $21,000 total annual income, I doubt your tax liability will be substantial.

Answer 4

What do you do? First off, you have to pay the tax. There's NO way around that.

Next, if you still have this job you need to increase the withholdings from one of the two jobs. I'd strongly suggest Single - 0 on the job with the lower income and Single - 1 or Single - 0 on the job with the higher income.

Each employer assumes that your job with them is the ONLY job you hold. They withhold taxes based upon that assumption unless you tell them otherwise on Form W4. You can reduce your withholding exemptions and / or tell the employer to withhold an additional dollar amount each pay period. There are worksheets on Form W4 to assist you in calculating your exemptions and additional withholding amounts.

You are solely responsible for ensuring that sufficient tax is withheld from your pay to cover your tax liability. You have only yourself to blame if not enough is withheld. If you fail to have enough tax withheld not only will you have to pay the additional tax, you may be assessed a penalty for underpayment of taxes.

Answer 5

This year you will have to bite the bullet, and pay the additional taxes due. When I received wages, I usually claimed zero on the deduction line, which gave me the greatest withholding amount. While the IRS doesn't pay interest on any overpayment, I have found that since all their penalties are based upon a percentage of what I owe, it better for me if the IRS owes me money. Also easier to receive a refund rather than pay additional taxes. Good Luck.

Answer 6

The 'not enough' is history and you owe the $$ regardless.
You did not pay enough when you had the job, you will pay that amount now , basic.
Many people pay attention to their with holding , and if it is insufficient , then they start putting some into savings.
If you did not, then start saving now as the due amount won't be 'due' until april 15th.

Some people deliberately have too little withheld , put it in savings , and earn extra $$ in interest on it until april.

You will have to bite the bullet, the IRS does not care why . . . you owe them , they want the $$ , end of story.

Answer 7

Sorry to say you ought to pay the tax owed. The employers withhold funds to deliver to the IRS depending on the style W4 you presented once you went to artwork for them. except you may educate that you had added withholding the IRS is going to decide on the money. you may contact the IRS and ask for an Installment settlement so that you'll be able to make month-to-month funds. The IRS will decide on you to finish style 433F to confirm the quantity you pays per 30 days. that is better effective to pay them off as instantly as you may. The Failure to Pay penalty is going to twenty-5 p.c. of the tax in some months and the IRS rates pastime on both the tax you owe and the penalty till you've finished paid the account.

Answer 8

Most times one can specify in $ amt or by a % what exactly you want withheld. If your bracket is 10% - v likely - use the 10% specification on all jobs after your main one. Most employers will comply, for that overrides whatever your exemption, etc, dictates.

Answer 9

why do people only worry about taxes at this time of year?? there is nothing that can be done. you will have to go to the bank and get into your saving to pay your tax bill. you do have saving don't you??