Boss did not withhold tax


M

Metspitzer

My niece worked for a company for 2 weeks and they paid her cash. At
the end of the 2 weeks the company said she made a mistake that cost
them money and tried to keep some of her money and fired/let her go.

I called the Ga Dept of labor. The woman there said she would talk to
the boss and get her money.

Here is what I think happened. When the labor dept got involved the
boss sent my niece part of her money and kept what should have been
tax withholdings. My niece and the dept rep agreed on how many hours
she worked and how much she was supposed to get from the boss. When
the money was short, the dept rep said that she would speak to the
boss and get him to return all the money.

After a few weeks, there was still no word from either the boss or the
dept rep. Today after having to call the dept rep back, now the boss
is saying that my niece will get the money she was short, but she will
have to fill out a tax form.

Since he has kept her money for close to a month now, how was he able
to withhold the money with no tax forms ever filled out? How would
he have reported the cash to the IRS if there were never any forms?

Does this sound like he was trying to steal the money from my niece?

Thanks
 
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P

paulthomascpa

Metspitzer said:
My niece worked for a company for 2 weeks and they paid her cash. At
the end of the 2 weeks the company said she made a mistake that cost
them money and tried to keep some of her money and fired/let her go.

I called the Ga Dept of labor. The woman there said she would talk to
the boss and get her money.

Here is what I think happened. When the labor dept got involved the
boss sent my niece part of her money and kept what should have been
tax withholdings. My niece and the dept rep agreed on how many hours
she worked and how much she was supposed to get from the boss. When
the money was short, the dept rep said that she would speak to the
boss and get him to return all the money.

After a few weeks, there was still no word from either the boss or the
dept rep. Today after having to call the dept rep back, now the boss
is saying that my niece will get the money she was short, but she will
have to fill out a tax form.

Since he has kept her money for close to a month now, how was he able
to withhold the money with no tax forms ever filled out? How would
he have reported the cash to the IRS if there were never any forms?

Does this sound like he was trying to steal the money from my niece?


Expect your niece to get a W-2 with reported taxes withheld. They may gross
up the pay to cover the taxes, that or just not have enough federal or state
withholding. If the amount retained by the employer wasn't enough to cover
the taxes that should be withheld then they may gross up her pay to cover
the taxes "withheld" or that should have been withheld.

A lesson here is to know exactly how an employer intends to treat the worker
before hiring on.
 
M

Metspitzer

Expect your niece to get a W-2 with reported taxes withheld. They may gross
up the pay to cover the taxes, that or just not have enough federal or state
withholding. If the amount retained by the employer wasn't enough to cover
the taxes that should be withheld then they may gross up her pay to cover
the taxes "withheld" or that should have been withheld.

A lesson here is to know exactly how an employer intends to treat the worker
before hiring on.
For some reason, I missed this when the reply was posted.

Thanks

How exactly to employers handle tax withholdings? Say I work my
first week for a company. I get a legal, everything above board,
paycheck. I get my earnings minus deductions listed on the check
stub.

Does the employer immediately send the deductions to the IRS? Is this
done at the end of the year.

After a month, should the boss still have my withholdings in the cash
register?
 
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P

paulthomascpa

Metspitzer said:
How exactly to employers handle tax withholdings? Say I work my
first week for a company. I get a legal, everything above board,
paycheck. I get my earnings minus deductions listed on the check
stub.

Does the employer immediately send the deductions to the IRS? Is this
done at the end of the year.

After a month, should the boss still have my withholdings in the cash
register?


There are several "due date" scenarios for employers. For what I'll call
micro employers, withholdings less than $2500 in a quarter, they can pay
that quarterly with the reports that are due. Over $2500 and you get bumped
up to a monthly payment schedule, so June withholding taxes are due July
15th. Monthly depositors generally have less than $50,000 of payroll taxes
due for a year. Above that and it's semi-weekly (ie: due the following
Wednesday or Friday after payday). Then, mega employers have same day
rules, this for payroll taxes over $100,000 on any given payday.

While the employer reports the combined employee and employer taxes
withheld, matching taxes and wages on a quarterly basis for all employees,
the individual employee record isn't sent till the W-2's go to SSA and SSA
sends that data to the IRS once a year.
 

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