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Shady Employer??
Can an employer change my exemptions without my permission to reduce their tax liability??
In calculating my W2/W4 (which is something I do every year just to make sure all numbers calculate properly) I noticed that my W2 sent from my former employer for 2020 had different withholding numbers than I calculated. Meaning they withheld too little taxes. I always claim zero exemptions because my spouse makes a great deal more in income and I want to reduce our year end tax liability as much as possible. Now, I looked up the W2/W4 information on the payroll website and it states my choice as zero exemptions, but the numbers just don't match up.
I researched to see if a company gets any benefit if they change an employees chosen exemption at any time and It appears that they can reduce their own tax liability this way! Such as setting my exemptions at a higher number for up to 3 quarters and then change it back to zero before the 4th quarter in order to not be caught! Meanwhile, less taxes go to the government and based upon my amount paid, it effects their contribution they must pay because they have to match what I paid! The company benefits while I end up having to pay more taxes at tax time!
Here's an example:
Exemptions claimed = 0
Figures from 2020 Company | Figures Personally Calculated | |
Exemptions Claimed = 0 | ||
1. Gross Wages | 7,885.66 | 7,885.66 |
2. Fed Income Tax Withheld | 847.54 | 1,610.48 |
3.Social Security Wages | 7,885.66 | 7,885.66 |
4.Social Security Tax Withheld | 488.91 | 488.93 |
5.Medicare Wages and Tips | 7,885.66 | ,7885.66 |
6.Medicare Tax Withheld | 114.35 | 114.35 |
12a.DD | 1,618.56 | 1,618.56 |
14.CSDI | 78.87 | 78.87 |
16.State Wages and Tips | 7,885.66 | 7,885.66 |
17.CA State Income Tax | 206.41 | 575.68 |
Please explain this to me??
Thanks!