I realized on my paystub that I have had too many exemptions. Can I get fired for this? ?

Question

I had a total of 10 but should have only been 2. I guess I've had this for almost 3 years. I do always end up owing the government when I file taxes. Can I get fired for this?

Answer 1

If you owe less than $1000 and pay it, no big deal.

If you owe more than $1000 *or* you end up owing, you may find that the IRS sends your employer a lockin letter.

Answer 2

No, you cannot get fired for this.  Nor is it illegal to owe the IRS money.

How much do you owe?  If it is in the neighborhood of $1,000, the IRS is not going to require you to change your W-4.

However, if the amount owed is more than $1,000, you are paying a penalty for underwithholding of tax.  If you pay your taxes by April 15, this penalty may not be significant.  But you run the risk of not being able to make the full payment on time, and this can result in substantial penalties and interest that can easily double the amount owed.  If this applies, re-do that W-4 and reduce the number of allowances so that the tax owed is $1,000 or less.

Answer 3

No, you cannot be fired for this but you should take steps to correct this.  If you have to pay more than, I believe it is 10%, more than you tax withheld, you can be subject to penalty by the IRS and your state tax board.  Some taxpayers can legally claim 10 or more exemptions, especially if they have a home mortgage.  

Now here is a clue, they usually do not catch it unless your wirthholding goes down, which is not that likely.  That does not mean that they won't catch it at one of their random audits.  So what I would suggest is that you reduct your exemptions by a few each year until the amount is more reasonable.  You do not have to work it so you don't have to pay anything, you need to get it close.

Answer 4

No you aren't going to get fired for this.  But go to your payroll dept and fill out a new W-4 form - people do it all the time - showing the correct number.  If you don't have a payroll department, ask your supervisor for a new W-4 form and fill it out and turn it in.

Answer 5

You can't get fired, and your employer can't get into any kind of trouble.  BUT you can get fined by the IRS.  At the very least you will owe a lot at the end of the year.