Tax question please?

[AprilBaby]

My daughter worked for 5 months at a major US university in student affairs. She left due to work harassment issues. She got her tax documents and the university took out state and Medicare taxes but no federal. Is that legal on their part? ( she did fill out her paperwork properly, this is not her first job). So now she owes money she doesn't really have. She lived paycheck to paycheck with student loans and her ridiculous low salary . Where to go from here? They are not responding to inquiries.

 

[sonnyjane]

My daughter worked for 5 months at a major US university in student affairs. She left due to work harassment issues. She got her tax documents and the university took out state and Medicare taxes but no federal. Is that legal on their part? ( she did fill out her paperwork properly, this is not her first job). So now she owes money she doesn't really have. She lived paycheck to paycheck with student loans and her ridiculous low salary . Where to go from here? They are not responding to inquiries.

Did they classify her as a private contractor? Try to confirm with them that everything was indeed set up properly first and that they didn't think she was exempt or anything like that...

If not, sometimes low-paying jobs don't deduct until a certain threshold is met (has happened with me before so I had my CPA friend explain it to me). Ideally your daughter should have noticed that with each paycheck's breakdown and put some aside accordingly. At least now she will know for the future. Not ideal but you CAN pay taxes with a credit card if she's in a bind right now.

 

[LLJsmom]

see other response.

 

[LLJsmom]

My daughter worked for 5 months at a major US university in student affairs. She left due to work harassment issues. She got her tax documents and the university took out state and Medicare taxes but no federal. Is that legal on their part? ( she did fill out her paperwork properly, this is not her first job). So now she owes money she doesn't really have. She lived paycheck to paycheck with student loans and her ridiculous low salary . Where to go from here? They are not responding to inquiries.

Did they classify her as a private contractor? Try to confirm with them that everything was indeed set up properly first and that they didn't think she was exempt or anything like that...

If not, sometimes low-paying jobs don't deduct until a certain threshold is met (has happened with me before so I had my CPA friend explain it to me). Ideally your daughter should have noticed that with each paycheck's breakdown and put some aside accordingly. At least now she will know for the future. Not ideal but you CAN pay taxes with a credit card if she's in a bind right now.

I would check to make sure they did not treat her as a contractor but I doubt it. They would not have withheld Medicare if they didn't treat her as an employee. And they also withheld state taxes. I am guessing the university made a mistake either by no withholding when they should have or the w-2 was incorrect and did not report the federal taxes that were withheld. You should confirm with the University. Are you sure they didn't withhold? Did you reconcile the pay received with the detail in the pay stub? Maybe there was an error on the w-2. If you are unable to get a response by 4/15, treat it as federally taxable and pay the tax. If you find out taxes were withheld, you can file an amended return to get the refund.

 

[AprilBaby]

Thank you for your reply! She got stubs emailed to her university account which was cut off before she could access them. We will go ahead and help her pay the taxes for now and see if we get answers from them soon. She was not a contractor. Expensive lesson learned for sure.

 

[marymm]

It could also have been the way she filled out her W-4 form - it sounds like she claimed exempt from federal tax withholding. The exemption only applies to federal income tax and not to Social Security or Medicare tax (or State income tax).

 

[AprilBaby]

We are working to get a copy to see what she put. Since it's not her first job it would be unusual if she did that.

 

[sonnyjane]

We are working to get a copy to see what she put. Since it's not her first job it would be unusual if she did that.

I've had probably at least 20 jobs and I still get nervous filling those things out lol!