Discussion:Penalties
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| Revision as of 20:10, 21 October 2009 Marykw (Talk | contribs) (Thank you) ← Previous diff |
Revision as of 20:25, 21 October 2009 KatieJ (Talk | contribs) (I don't believe) Next diff → |
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| + | {{ForumReplyPost|UserID=KatieJ|Date=21 October 2009|Text=I don't believe the late payment penalty will apply to the employer. It sounds as though Mary's client paid in X dollars in FIT withholding, but reported a larger amount (X + Y) on his employees' W-2s and on the fourth quarter 941 and the 940. There is no underpayment if the correct amounts actually withheld were actually paid in. He intends to issue amended 2008 W-2s and an amended fourth quarter 941 (and 940) to show the amount of tax that was actually paid in. (Has the IRS not billed him for the difference between the amounts reported on the 941/940 and the amount he paid in?) | ||
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| + | The employees will owe additional taxes for 2008 because they claimed credit for more than was actually withheld from their paychecks. They, not the employer, will be subject to late payment penalties. A conscientious employer would reimburse them for that, I think -- grossed up for the tax effect of the reimbursement, of course. | ||
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Revision as of 20:25, 21 October 2009
Discussion Forum Index --> Basic Tax Questions --> Penalties
Discussion Forum Index --> Tax Questions --> Penalties
| 21 October 2009 | |
| Does anyone have any idea of penalties to an employer who made an honest mistake on W-2's and overstated the income tax withheld? He now needs to correct 2008 w-2's and 940 last quarter report and is asking me how much do i think it will be? I have no idea because I have not experienced this problem before. Of course, employees will have to re-file tax returns also. | |
| 21 October 2009 | |
| The rate for honest underpayments is .5% per month, capped at 25%. | |
| 21 October 2009 | |
| I don't believe the late payment penalty will apply to the employer. It sounds as though Mary's client paid in X dollars in FIT withholding, but reported a larger amount (X + Y) on his employees' W-2s and on the fourth quarter 941 and the 940. There is no underpayment if the correct amounts actually withheld were actually paid in. He intends to issue amended 2008 W-2s and an amended fourth quarter 941 (and 940) to show the amount of tax that was actually paid in. (Has the IRS not billed him for the difference between the amounts reported on the 941/940 and the amount he paid in?)
The employees will owe additional taxes for 2008 because they claimed credit for more than was actually withheld from their paychecks. They, not the employer, will be subject to late payment penalties. A conscientious employer would reimburse them for that, I think -- grossed up for the tax effect of the reimbursement, of course. | |
