[mymonsters]

Employer took out federal taxes when they weren't supposed to (we claim exempt). We noticed it right away and contacted them. Can we get our money back right now or do we have to wait till tax time next year? Basically we can't afford to wait for the money that was taken from us when it wasn't supposed to be. We either can't make house and car payment or we can't afford gas and groceries.
Company is saying they can't do anything for us.
Any and all help is appreciated

[joypulv]

On what basis did you think you were you able to claim exemption from withholding? You own a house and car in the US and work as a waged employee in the US?
Then any employer has to withhold taxes. Whether you get it all back when you file, that depends on exemptions and deductions.

[mymonsters]

We claim exempt every year and have for the past 5 years or so.

[joypulv]

You haven't really answered the question. You ALWAYS have to have Medicare and SS withheld.

If you got a full refund of all federal income tax the year before, you have to give your employer a new W-4 each new year by 2/15 with boxes 5 and 6 blank and box 7 saying exempt. In this case you need a new W-4 each year.

[Fr_Chuck]

I would say they are not property filing taxes, since I can't see why they can be exempt, they don't meet the guidelines,
And should owe a penalty for not paying in proper taxes withheld during the year

Just because you have done it, does not mean you are suppose to do it

[joypulv]

I think it's possible to get a full refund with a huge mortgage and a whole mess of dependents and maybe high medical. If you got a full refund, you can claim 'exempt' the next year.

The reason you have to give your employer a new W-4 every year by 2/15 is because most people start owing as the years go by. The IRS doesn't look kindly on people who use the exemption in a year when they shouldn't.

[mymonsters]

We are exempt according to the government. No federal taxes are taken from our checks and yes we receive a refund every year. We are legally claiming exempt. The question is since the employer had all the paperwork and still took out the taxes can we get that money back now or do we have to wait till next year at tax time?

[joypulv]

You gave your employer a NEW W-4 for this year?
A brand new W-4, filled out in 2011, and handed to your employer, THIS YEAR, by 2/15?
.
If you DID, then demand that they adjust future paychecks (easy) and refund past ones (difficult bookkeeping).
If they refuse, you have to duke it out with them and the IRS.
If you DIDN'T, you have to wait.
If you didn't and got away with not doing a new one each year so far, and the employer just realized their mistake, that's your problem.
The information is all in the regular tax guide that you can get at any PO. Find the section on exemptions and show it to them if you DID give them a NEW one THIS YEAR.

[mymonsters]

Yes we gave them the paperwork this year. They are telling us that legally they can't give us back the money. To us they took it illegally (since they had the legal paperwork we are required to fill out).
To answer previous questions, we do have enough deductions to claim exempt even though we own a house and vehicle. And yes we do meet the guidelines for claiming exempt, we have checked.
Thank you to all that helped. We will be handing a copy of the book to the employer and taking it from there. Any other suggestions pertaining to this tax issue would be welcomed.

[joypulv]

I just realized that they can't just adjust future paychecks if you have zero withholding. They have already turned that money in to the IRS, and there is nothing they can do to get it back now, as far as I know (interesting question though). But you should demand that they start withholding nothing immediately. If they won't, which would be very strange since it's no loss or gain to them, then you have to probably contact the IRS (very difficult during tax time) and try to make them make this happen. Not easy.

[excon]

Hello my:

It's a shame when mistakes like this happen and nobody wants to step up to the plate... If your company didn't read your W-4 properly and sent some of your money off to the IRS, then your company should provide you with an interest free loan until your refund comes back..

Instead, they throw up their hands and say they can't DO anything... That's CRAP. They WON'T do anything. So, I don't know HOW much you want to keep your job, or how much you want to make an issue out of this, but since I can get hired real easily tomorrow, I'd DO it ALL.

And, I'd do it in WRITING. Send a certified letter to the PRESIDENT, asking him to step up to the plate to right his company's wrong.

excon

[joypulv]

3 cheers