Employer did not withold enough federal taxes frompaycheck?

Question

Previous employer did not withold enough federal taxes for 2004,2005, and half of 2006. I.R.S. is after me for the taxes what can I do?

Answer 1

What can you do?  Set up a payment plan with the IRS and pay the taxes.

If an employer doesn't withhold enough tax it's virtually always the TAXPAYER'S fault, by not filling out their Form W-4 properly.  Some folks try to game the system to get a larger paycheck.  Others don't read the instructions carefully and fill it out incorrectly.  Whatever the reason though, it's up to YOU to fill it out properly and make sure that sufficient tax is withheld.  Sorry, but that's how the system works.

Answer 2

Sorry to say you have to pay the tax owed.  The employers withhold funds to send to the IRS based on the Form W4 you provided when you went to work for them.  Unless you can show that you had additional withholding the IRS is going to want the money.  

You can contact the IRS and ask for an Installment Agreement so you can make monthly payments.  The IRS will want you to complete Form 433F to determine the amount you can pay per month.

It is better to pay them off as quickly as you can.  The Failure to Pay penalty goes to 25 percent of the tax in a few months and the IRS charges interest on both the tax you owe and the penalty until you have full paid the account.

Answer 3

You have to pay.  It was (and is) YOUR responsibility to set your withholding.  That's what W-4s are for.

Answer 4

All correct answers to you question are going to be variations on "You have to pay it out of your pocket."

Answer 5

You have to talk about now a payment plan.

You have realise earlier when you did your tax in 2004, so you to are responible for this too.

It sucks but that is life.

Talk to be ppl at the IRS, at the end of the day, they what their money.

Answer 6

Pay them!

If you can't there are other options. They can give either 60 or 120 days to full pay, depending on the current status of the account. Or you can enter into an installment agreement. If you can't pay at all, you may qualify for deferred collection status. This will require you giving them financial information and they may have to file a federal tax lien depending on the balance.

Answer 7

Have you been to a tax professional yet?  I suggest it.

You will need to set up a payment plan with the IRS.  You will tell them how much you can pay each month.  You will tell them the date you will send it in by (15th of each month..)  And then you NEED to pay it on time. If you dont, the entire amount becomes due imediatly.

"How to Set Up an Installment Agreement

Taxpayers wishing to pay off a tax debt through an installment agreement, and owe:

$25,000 or less in combined tax, penalties, and interest can use the Online Payment Agreement (OPA) or call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465, is available online that can be mailed to the address on the bill."

You need to also go to your employer and fill out another W4.  Your employer withholds the amount you tell them to based on that W4.  There is a work sheet to help you fill out your W4 on the back of it.  You need to put on that form if you are single or married, and the number of exemptions you will be claiming on your tax return.  The higher the number of exemptions the less that will be taken out of your checks.  If you claim single with 7 exemptions, they wont take out very much in taxes, if you claim single and 1 exemption they will take out more.  Most likely, your employer took out exactly what they should have based on your answers on that W4 you filled out when you were first hired.

Check out the source box below.  There is a link to a W4 you can fill in and print and take to work.  There is also a link to the irs website where you can fill in an online application for a payment arrangement.

Answer 8

Your employers withheld the taxes from your paycheck by the information you had on your W4.  So don't blame your employer, now you should visit your employer and make changes to your W4, maybe you should claim "0" Zero.

You should contact IRS to set up an installment agreement, call 1-800-829-0922 or 1-800-829-7650.  Or download form 9465 from the IRS website and mail completed form with your payment proposal, and once IRS receives your request they will send you a letter letting you know if your installment agreement was granted or not.

Answer 9

the cool thing is you put that money to work and invested it in your small business....now is the time to give the government their money. It was never yours, but at least you used it wisely and grew it by 500%.

I know people who do that.  They pay their taxes late only because they know they can use it during the year and make it grow. The penalty is (for them anyway) small enough to handle.

Answer 10

basically nothing. next year you will just have to have them withhold extra to cover the amount.

Answer 11

Your withholding was based on the W-4 *you* gave the employer.  It was your responsiblity to fill the form out correctly, so it get it out of your old system that your employer is at fault.

Second, if you had actually fil/ed your 2004 tax return in April of 2005, you would have known that you had a problem then and could have adjusted your withholding for 2005 and 2006.

Set up a payment plan and suck it up.

Answer 12

you filled out a W-4 saying how much to withhold and you did it incorrectly...

File a new one, it will depend on your marriage status/children/etc...for how to fill it out correctly

Answer 13

You can ahhhh pay them.  You got the money.  Just consider it a loan.  Why is this coming up now.  This should have been dealt with in early 2005 after you filed your 2004 income tax.  If it happened again in 2005 then you should have put money aside and paid extra taxes along the way.

Pay it quick.  The IRS has high interest rates.

Answer 14

You have no choice other than to pay the IRS your debt and move on.

Answer 15

Pay what you owe.  If you can't pay it all at once, the IRS will set up a payment plan.

You can't exactly blame your employer - they withhold based on your W-4.  And when you came up short when you filed for 2004, and owed for that year, didn't you do anything to change it so it wouldn't go on for another year an a half?

Answer 16

Taxes owed must be paid. There are options here, you can refile your taxes by filing Form 1040X (Consult your tax advisor), you can make an installment plan, or you can use a CPA to file for an Offer in Compromise where you and the IRS come to (usually) substantially lesser amount to pay.

If you are having sever financial hardships, then contact the TAXPAYER ADVOCATE at the IRS the telephone number is:

Call the Taxpayer Advocate Service Case Intake Line to see if you are eligible: 1-877-777-4778

Answer 17

Your screwed..lol