What if the employer do not take out Federal tax, even thou I filed W-4?

Question

What if the employer do not take out Federal tax, even thou I filed W-4?

Answer 1

If you do not earn enough to need to pay federal income tax your employer may not withhold any. The bottom tax bracket actually "makes" money from income taxes under the current tax code, paid for by the rest, through items like the earned income tax credit.  

Answer 2

Simply , because you filed a W-4 does not make you an employee. And, the employer might not be required to withhold tax.

But, for this question I am going to assume that you are an employee and the employer is withholding Social Security and Medi-care (SS/MC). That is one of the tests that you both agree your an employee instead of a contractor.

In this case it would depend on the information that you supplied on the W-4, to determine what your employer should have withheld in income tax.

But, even that is a moot point. If your employer failed to withhold income tax you are still liable for the income tax. The best you can hope for is an abatement on any penalty or interest.

Think of it this way...the money for the tax was supposed to be taken out from every paycheck...if it wasn't you got that money. Meaning that you still owe the tax. In many ways that is a good thing, you had the use of the money during the year. Instead of an interest free loan to the government.

However, this is only true for income tax...it is not true if your are an employee and the employer didn't withhold SS/MC.

Hope this helps.