Wht to do if I sent over my W-2 to my payroll company last week trying to change my dependents back from 9 to 1 but it wasn’t changed?

UPDATED: Jan 5, 2013

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Wht to do if I sent over my W-2 to my payroll company last week trying to change my dependents back from 9 to 1 but it wasn’t changed?

Now, when my W-4 comes, it will have the 9 dependents on it. Will I owe the IRS and state? Since the payroll company was supposed to change it that day, who is liable?

Asked on January 5, 2013 under Employment Labor Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Yes, if you are having more withheld than you'd like, you will have to pay the IRS at tax time. But the payroll company is not liable, because you are not paying any more total--all that's different is that you're paying it later, not sooner.

Example, with simple, made-up numbers. Say you earn $5,000 a month and are paid once monthly. Say that you are in a tax bracket such that you pay 25% of your income in taxes. That means you earn $60k per year and pay $15k in taxes. If you have minimal withholding (lots of dependents), only, say, $500 is taken out per paycheck. That means that $500 is taken out each month, or $6,000 per year. You will then owe another $9,000 when you file your taxes.

On the other hand say that you have a great deal withheld (0 or 1 dependents) and $1,500 is taken out per check, or $18,000 per year. At the end of the year, you'd get $3,000 back from the IRS (tax refund).

In both cases, you pay a total of $15,000 in taxes. Changes in withholding do not change your total tax liability--it just changes whether you have the money withheld up front, or pay it out on the back end. Since there is no actual extra cost to you, there would be no liability for the payroll company, frustrating as this undoubtedly is.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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