Is it by law that an employer should deduct federal taxesand if so what can you do because now you have to pay the IRS and lagre sum of money?

Answer 1

Your employer is required to ask you to fill out a Form W-4. The employer takes the number of allowances you filled out on your Form W-4 and looks in a table to find out how much tax to withhold. He is then required to withhold the amount that the table says.

Your employer is not required to investigate how you filled out Form W-4 and your employer is not required to make sure that you are having enough withheld or to make sure that you will not owe more money at the end of the year.

The amount of federal taxes deducted from your salary is just a rough estimate of how much a typical person owes in taxes. It is never the exact amount. The exact amount is determined only at the end of the year when you fill out your Form 1040. If not enough was withheld, you are responsible to pay the difference.

Surely your employer gives you a pay stub or statement of some sort with each payment. You are responsible to check it and make sure that everything is right.

If your employer made some sort of gross error or is openly defying the law and not withholding taxes from its employees, you can report them to the IRS if that makes you feel better. (If you do this, start looking for a new job, you won't be employed much longer.) But it will make no difference to your situation.

You still have to pay your taxes. You can pay by credit card (for a service fee) or set up an installment agreement with the IRS.

And if you have not yet filed your tax return (Form 1040) DO IT NOW!!! File it right now even if you cannot pay. A penalty of 5% of the amount due is being added to your taxes for each month that you do not file. Let me emphasize that you should file immediately even if you can't pay now.