My son has had underpayment penalties three years running ($50 to $100). It turns out his employer was withholding far less than what should be withheld when claiming one single filer exemption on his W4.
My math seems to indicate they took his gross and subtracted the standard deduction and used that as the taxable amount on the withholding schedule. They should be using his Gross as that is how the IRS built the tables.
Other employees have had the same tax issues. Is there a way he can get out of the penalty? Is his employer breaking the law? Can my son make the employer pay it?
