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Message
Tax question......
Posted on 8/16/10 at 7:57 am
Posted on 8/16/10 at 7:57 am
I just noticed on my checks that my employer has not taken out any state or federal taxes from my checks yet this year. Is there anyway that I can put anything on my employer, blame wise, to have them assist me with paying the back taxes, or am I all alone on this one?
Also, a co-worker had this same thing happen to him a couple of years ago, but it wasn't caught until the beginning of the following year. The IRS said that since the employer didn't pull any taxes out for the previous year, that it was the employer's responsability to pay the taxes and not the employee. Has anyone ever heard of this?
Just trying to get some info before I contact my HR department
And I also work overseas....
Also, a co-worker had this same thing happen to him a couple of years ago, but it wasn't caught until the beginning of the following year. The IRS said that since the employer didn't pull any taxes out for the previous year, that it was the employer's responsability to pay the taxes and not the employee. Has anyone ever heard of this?
Just trying to get some info before I contact my HR department
And I also work overseas....
Posted on 8/16/10 at 8:09 am to Geauxtigrs04
quote:
And I also work overseas....
You may be in a loophole. Some years back several of the major overseas defense contractors (KBR, DynCorp) exploited a tax loophole and didn't withhold or pay taxes on overseas workers.
In response, Congress passed the HEART Act which was supposed to close this loophole. But as Congress does, it closes one loophole and opens another.
The new loophole allows overseas companies that are not more than 50% owned by an American firm to continue the past practice. So what have some of this firms been doing? You guessed it -- they created shell companies in the Caymans, etc. and moved all their overseas employees under them.
You think you work for Company X, when in fact you may be working for a Cayman-based subsidiary of said company.
Posted on 8/16/10 at 8:21 am to Quidam65
This would be nice, but I'm the only one here that has this issue, and my company is based in Houston, as am I.
Posted on 8/16/10 at 8:23 am to Geauxtigrs04
Then you are probably dealing with computer error (i.e., someone can't type at their computer).
Sorry about that. You may get clobbered on a future paycheck as they correct the error, but better that than dealing with the IRS later.
Sorry about that. You may get clobbered on a future paycheck as they correct the error, but better that than dealing with the IRS later.
Posted on 8/16/10 at 8:29 am to Quidam65
the first thing I did when I noticed it was to make sure I filled out my W-4 correctly, and I did. They just screwed up with typing it in the computer...
Posted on 8/16/10 at 8:30 am to Geauxtigrs04
Hopefully they'll get it fixed soon so you won't have to root from Cell Block 6.
Posted on 8/16/10 at 8:36 am to Quidam65
yeah same here.... although I could just stay overseas for a while
Posted on 8/16/10 at 9:22 am to Geauxtigrs04
On your w4 you didnt mark the box for exempt did you. That thing doenst read very clear and a lot of people check that box.. Either way I cant believe youve been getting paid for 8 months and havent noticed any taxes coming out. You better start checking that thing closer...
Posted on 8/16/10 at 9:26 am to keeton350
quote:
Either way I cant believe youve been getting paid for 8 months and havent noticed any taxes coming out. You better start checking that thing closer...
Posted on 8/16/10 at 9:28 am to Geauxtigrs04
Your employer's payroll software may be taking into account the foreign earned income exclusion. If you qualify, up to $91,500 of foreign earned income may be excluded from United States income tax.
Posted on 8/17/10 at 3:10 am to Poodlebrain
Well the crazy thing is that they've been taking out SS and Medicare, but no Federal or State... I just never paid attention to it. And yes, I do believe that I qualify for the $91,500 exemption.
I spoke with my CPA yesterday and told me that I will be fine, and that I may still get money back next year
I spoke with my CPA yesterday and told me that I will be fine, and that I may still get money back next year
Posted on 8/17/10 at 3:13 am to keeton350
quote:
On your w4 you didnt mark the box for exempt did you
No, I did not write Exempt on my W-4
Posted on 8/17/10 at 8:37 am to Geauxtigrs04
Who Qualifies for the Exclusions and the Deduction?
If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.
If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to $91,400 of your foreign earnings. In addition, you can exclude or deduct certain foreign housing amounts. See Foreign Earned Income Exclusion and Foreign Housing Exclusion and Deduction, later.
You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer. See Exclusion of Meals and Lodging, later.
1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.
You fail this test!
2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
You fail this test!
3. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
This is most likely the case. Probably not a input error. If you will not be at this assignment for >1 year you should contact your HR to begin having some taxes withheld if you want somebody to babysit your money. Personally I'd just take 10% of my income and stick it in some sort of interest bearing account, and pay your tax liability with that if need be.
If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.
If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to $91,400 of your foreign earnings. In addition, you can exclude or deduct certain foreign housing amounts. See Foreign Earned Income Exclusion and Foreign Housing Exclusion and Deduction, later.
You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer. See Exclusion of Meals and Lodging, later.
1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year.
You fail this test!
2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year,
You fail this test!
3. A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months.
quote:
Your employer's payroll software may be taking into account the foreign earned income exclusion. If you qualify, up to $91,500 of foreign earned income may be excluded from United States income tax.
This is most likely the case. Probably not a input error. If you will not be at this assignment for >1 year you should contact your HR to begin having some taxes withheld if you want somebody to babysit your money. Personally I'd just take 10% of my income and stick it in some sort of interest bearing account, and pay your tax liability with that if need be.
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