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gross wage deductions?

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  • gross wage deductions?

    i used to work at a retail automotive store in wisconsin. while i worked there i bought parts for my personal vehicle through our suppliers. the person that did the accounting and payroll deducted all of the items out of my gross pay, i had nothing to do with it. is this legal and would i be responsible for paying back taxes or would the business? thanks

  • #2
    Although purchase of automotive parts for personal use through a supplier is possibly a perk of employment (e.g. getting the goods at wholesale cost), I am unaware of any situation where it would be counted as pre-tax deduction, unless your employer is reporting it as some type of commuter or parking benefit (which is perhaps stretching the imagination). I would be interested to see how it is recorded on the W-2.
    "What would a reasonable person do?"

    aryels
    A.S. Paralegal
    Criminal Justice Student--B.S.

    "Give this guy 15 cents and tell him to go to hell."

    Comment


    • #3
      Originally posted by aryels
      Although purchase of automotive parts for personal use through a supplier is possibly a perk of employment (e.g. getting the goods at wholesale cost), I am unaware of any situation where it would be counted as pre-tax deduction, unless your employer is reporting it as some type of commuter or parking benefit (which is perhaps stretching the imagination). I would be interested to see how it is recorded on the W-2.
      it isnt on the w-2. its not listed anywhere. they deducted it out of gross before they figured anything on the check. example: if i grossed $2,000 and had to pay for $500 worth of parts they would act as if i only made $1,500 and write $1,500 on the check as gross and deduct taxes from that.

      Comment


      • #4
        are you saying that the employer is misrepresenting the actual number of hours worked?

        i.e.
        Employee works 20 hours @ $10 hr = $2000 gross pay

        Employer records only 15 hours @ $10 =$1500 gross pay

        I would say that the additional $500 spent on personal items is taxable income, for which both the employee and employer is liable; howbeit, the taxable amount of $500 is rather small. The employee is liable for income tax (state, federal, FICA) on the $500, the employer is liable for employment taxes and any penalties.

        Before making an issue of it, you should contact the employer and allow them to explain and make necessary corrections.
        "What would a reasonable person do?"

        aryels
        A.S. Paralegal
        Criminal Justice Student--B.S.

        "Give this guy 15 cents and tell him to go to hell."

        Comment


        • #5
          Originally posted by aryels
          are you saying that the employer is misrepresenting the actual number of hours worked?

          i.e.
          Employee works 20 hours @ $10 hr = $2000 gross pay

          Employer records only 15 hours @ $10 =$1500 gross pay

          I would say that the additional $500 spent on personal items is taxable income, for which both the employee and employer is liable; howbeit, the taxable amount of $500 is rather small. The employee is liable for income tax (state, federal, FICA) on the $500, the employer is liable for employment taxes and any penalties.

          Before making an issue of it, you should contact the employer and allow them to explain and make necessary corrections.
          the employer would never make any corrections, they know they did wrong and would pin it on me. they arent misrepresenting hours. they figure my gross by multiplying hours x hourly wage ($2,000). then they deduct the parts and that is the gross they report to the state ($1,500). they dont keep any time records on my pay stubs or checks, so nobody would know but them and i. i used $500 as an example, the real amount is over $5,000 spread over a few years. im bringing this all up because i filed for unpaid overtime and they did not send actual copies of the timecards as proof of the hours i worked. they sent computer generated records which i believe are inaccurate. they do not want the state to see the actual time cards because they will see how the numbers are way off. i just wondering, do i have the state persue this and possibly get in trouble for all the tax that wasnt paid on the parts? i really want my overtime pay, but i dont want to be responsible for tax fraud. thanks for the help so far!

          Comment


          • #6
            What type of business? e.g. partnership, corporation, LL.C. LL.P, etc?
            "What would a reasonable person do?"

            aryels
            A.S. Paralegal
            Criminal Justice Student--B.S.

            "Give this guy 15 cents and tell him to go to hell."

            Comment


            • #7
              Originally posted by aryels
              What type of business? e.g. partnership, corporation, LL.C. LL.P, etc?
              inc. if that helps. 5 full time employees (4 are family) and a couple part time employees.

              Comment


              • #8
                and how many overtime hours, or how much overtime pay did you file for? Were you compensated for that overtime?
                "What would a reasonable person do?"

                aryels
                A.S. Paralegal
                Criminal Justice Student--B.S.

                "Give this guy 15 cents and tell him to go to hell."

                Comment


                • #9
                  Originally posted by aryels
                  and how many overtime hours, or how much overtime pay did you file for? Were you compensated for that overtime?
                  i dont have any time records, but im pretty sure they owe appx $1,300 in overtime pay. they claim they owe me $827.36 on the letter that shows the amount they think they owe me they also made some false statements about me that leads me to believe they cut some hours off the time owed. here is what the letter to the state said. (the state sent me a copy).

                  "david never worked a 46 hour week. we have never refused him copies of his time cards or access to them. he reviewed each time card when he recieved his monthly checks. at times, he would take a shorter than the 30 minute lunch we requested him to take. he would eat at various times later in the day while on the clock. he also worked on his own vehicle on company time and was reprimanded for it."

                  i did work 46 hours - lunch time, they did refuse copies of the records, i did take a shorter lunch (i think they have to offer 30 minutes, doesnt mean i have to take it), didnt eat on the clock, and didnt work on my own vehicle while on the clock. the statement that worrys me the most is the last line. it sounds like they took time off of my card.

                  Comment


                  • #10
                    Well, now we are getting somewhere. Some of the controversy is the difference of claimed overtime hours. First, you realize that Wisconsin labor laws suggests a 30 minute lunch as the standard, and the time of the work day when the lunch time should be taken. A company has the right to insist that an employer utilize the full lunch period, albeit some companies will make allowance if the lunch period is at a busy time of the day.

                    An employer also has the right to limit the number of overtime hours that it allows an employee to work.

                    Without any documentation, you claim approximately $1300 of owed overtime pay. If you do not have any documentation to prove that figure, I cannot say if the amount is correct or incorrect. The company has the time cards and admits liability when it claims that it owes only $827.36, (which is taxable.)

                    The letter that you mention is from what State Agency? Unemployment? Wisconsin Dept of Revenue?
                    "What would a reasonable person do?"

                    aryels
                    A.S. Paralegal
                    Criminal Justice Student--B.S.

                    "Give this guy 15 cents and tell him to go to hell."

                    Comment


                    • #11
                      Originally posted by aryels
                      Well, now we are getting somewhere. Some of the controversy is the difference of claimed overtime hours. First, you realize that Wisconsin labor laws suggests a 30 minute lunch as the standard, and the time of the work day when the lunch time should be taken. A company has the right to insist that an employer utilize the full lunch period, albeit some companies will make allowance if the lunch period is at a busy time of the day.

                      An employer also has the right to limit the number of overtime hours that it allows an employee to work.

                      Without any documentation, you claim approximately $1300 of owed overtime pay. If you do not have any documentation to prove that figure, I cannot say if the amount is correct or incorrect. The company has the time cards and admits liability when it claims that it owes only $827.36, (which is taxable.)

                      The letter that you mention is from what State Agency? Unemployment? Wisconsin Dept of Revenue?
                      the letter is from the dept of workforce development equal rights division. they never had a problem with short lunches while i worked there. they seemed to like it most of the time when we were busy. the owner tries to justify not paying overtime by trying to make me look bad. my biggest concern is the gross deductions, should i take the $827.36 and drop it or take the chance of losing it all to taxes on parts?

                      Comment


                      • #12
                        The decision will probably be dictated by your own conscience. You know that if you receive the additional amount for overtime wages, it is taxable income and you will have to report it, since the amount will almost certainly be reported to the IRS as wages. The amount would be reported on the tax return for the year which you receive the wages.

                        Your question was if the money taken from your paycheck for automotive parts is taxable income. Rightfully it is, however unless you have documentation, it might be a little difficult explaining the situation to the IRS.

                        If you decide to claim the additional amount as income, you would have to file amended tax returns for the years during which the amounts were deducted from your paychecks. Unless you have receipts from the purchases of the automotive parts, you would not have any documentation to verify the transactions or amounts. However, the IRS would probably accept the amended returns with the additional amounts listed as income.

                        However, amending the tax returns with the amounts listed as wages and an explanation could also act as an indicator to the IRS that they also need to check the former employer's tax returns and also the amounts deposited for employment taxes. Would you consider yourself as the 'bad guy' if you cause an IRS audit?

                        On the other hand, something or someone else could trigger an audit, and if the IRS was to discover that the former employer is keeping two sets of books, or committing some other type of fraud, all of the employees' tax returns could also come under scrutiny, and you could also get audited.
                        "What would a reasonable person do?"

                        aryels
                        A.S. Paralegal
                        Criminal Justice Student--B.S.

                        "Give this guy 15 cents and tell him to go to hell."

                        Comment

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