a company my husband worked for towards the end of the year only took out 10% of what they should have been taking out, and now we won't be getting any tax return at all. he actually owes $17. how do companies get away with this? i thought they were obligated to take out the legally required amount. there were no changes in our tax status, and he claimed the same number of dependents he always does.
2007-02-22 07:37:59 · 8 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
looking at it that way, i guess it's not so bad. but he files the same way every year, and we've always gotten a refund. not a big one, but at least something. i can't help but wonder how doing the same thing he's always done has gotten us such different results this time.
2007-02-22 08:28:29 · update #1
Employers withhold tax based on the instructions they received from the employees. The employee alone is responsible for ensuring that the employer has the necessary information to withhold the proper amount of tax. In your situation, they DID withhold the legally required amount. Whatever your husband put on his W4 determines how much was withheld.
Since you are paying in $17.00, your withholdings are PERFECT just as they are. When you get a huge refund, it's ONLY because you foolishly decided to give the government an interest free loan. You chose to keep your money instead, a very WISE move on YOUR part.
2007-02-22 07:46:15 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Tax tables/rates change every year and the IRS does not come out and say, "hey we are screwing with your taxes!"
If the company is using the correct tax tables or a good software program they do not alter the amounts.
Now that you know that you need more money withheld your husband should fill out a new W-4 and claim fewer dependents, or ask to have extra taken.
But using the IRS as a savings account is not very smart, they do not pay interest! If he only had to pay in $17 you are doing good. Instead of letting the IRS hold your money all year set up a savings account at the bank he cashes his check and have him put $25 a week into savings. At the end of the year you would have $750 and it would earn a few bucks in interest
2007-02-22 07:49:18 · answer #2 · answered by Gem 7 · 0⤊ 0⤋
Why would this upset you? You already have the money. In fact you got it sooner than you would have. The total amount of tax you pay for the yr is not changed only when you pay it. Getting a big refund is due to an error on your part in over withholding & is not a good thing. Interest free loan to govt.
2007-02-22 07:59:48 · answer #3 · answered by vegas_iwish 5 · 0⤊ 0⤋
they take out based on tax tables- they actually did a good job with the amount withheld- most companies goals are to keep your refund or amount owed as close to zero as possible
$17/52 weeks = $.33 a week they were off
he could probably request a higher percentage being taken out if he asks the payroll department.
2007-02-22 07:47:58 · answer #4 · answered by Anonymous · 0⤊ 0⤋
He should verify what they have on the W-4 they have on file for him, and file a new one if it's wrong. The W-4 controls what is taken out, based on the person's earnings. It sounds like something in his W-4 filing got messed up - maybe somebody doing data entry hit a wrong key or something.
But if you ended up real close on what you actually owed, and it sounds like you did, then you kept your own money through the year rather than lending it interest-free to the government.
2007-02-22 09:15:59 · answer #5 · answered by Judy 7 · 1⤊ 0⤋
They base what they take out in taxes on the information your husband gave them when he was hired. He can request to have more taken out. He has to do that through the Human Resources Department where he works.
2007-02-22 07:46:28 · answer #6 · answered by LolaCorolla 7 · 0⤊ 0⤋
below are the gross income quantities consistent with submitting prestige that in the time of the experience that your attain you're required to report. single - below sixty 5 $8950 single - sixty 5 or older $10,3 hundred Married submitting mutually - the two below sixty 5 $17,900 one below sixty 5 $18,950 the two sixty 5 or older $20,000 Married submitting one after the other $3500 Head of kinfolk - below sixty 5 $11,500 sixty 5 or older $12,850 once you're a based of somebody else then there's a distinctive formula. additionally you're required to report in case you internet self-employment income of a minimum of $4 hundred. You owe specific specific taxes as selection minimum Tax, extra tax pertaining to to qualified retirement plans, kinfolk emp
2016-12-14 03:20:20 · answer #7 · answered by ? 4 · 0⤊ 0⤋
Also, you said "he" owes $17.00......????
I hope you filed jointly. Filing jointly may increase your refund from filing separately.
If he filed "Head of Household", the return is wrong and needs to be redone.
2007-02-22 08:03:34 · answer #8 · answered by Wayne Z 7 · 0⤊ 0⤋