Does an employee have the right to pay the federal and state taxes themselves instead of having employer doing it?
You can file a revised W-4 with your employer claiming more allowances than you do now. More allowances means less Federal tax and (if applicable and likely with a separate form) less state tax. This doesn't affect social security and Medicare with holding, though.  That being said, US taxes are on a pay-as-you-go system. If the IRS determines that you're claiming more allowances than you're eligible for and not paying the proper taxes throughout the year, they will hit you with an underpayment penalty fee, which would likely negate the benefits of keeping that money in the first place. This is why independent contractors and self-employed people pay quarterly or estimated taxes. Depending on the employer, they may require proof of the allowances for adjustment before they accept the revised W-4. No. An employer is legally obliged to deduct taxes from your pay cheque and send them to the IRS. The only way round that is to either provide evidence of deductions that would reduce your tax bill to nothing, or to become self-employed. No, even businesses pay taxes quarterly.  So if you formed Nathan, LLC, or otherwise became self employed, you'd still have to file quarterly estimates and make tax payments.  This would cause taxes to be a much more high touch part of your life. However, you should ensure that you're claiming the proper exemptions etc to avoid excessive withholding.
Should I have a W-2 re-issued? A W-2 can be corrected and a new copy will be filed with the IRS if your employer incorrectly reported your income and withholding on a W-2 that they issued. In this case, though the employer didn't withhold those taxes, they should not reissue the W-2 unless they plan to pay your portion of the payroll taxes that were not withheld. (If they paid your share of the taxes, that would increase your gross income.) Who pays for the FICA I should have paid last year? Both you and your employer owe 7.65% each for FICA taxes. By law your employer is required to pay their half and you are required to pay your half. Both you and your employer owe additional taxes because of this mistake. Your other questions assume that your employer will pay your portion of the taxes withheld. You employer could decide to do that, but this also assumes that it was your employer's fault that the mistakes were made. If you transitioned to resident alien but did not inform your employer, how is that your employer's fault? In the USA, you probably owe Self Employment Tax. The cutoff for tax on this is 400$. You will need to file a tax return and cover the medicaid expenses as if you were both the employer and employee.  In addition, if he earns income from self-employment, he may owe Self-Employment Tax, which means paying both the employee’s and employer's share of Social Security and Medicaid taxes. The trigger for Self Employment Tax has been $400 since 1990, but the IRS may change that in the future. Also see the IRS website.  So yes, you need to file your taxes. How much you will pay is determined by exactly how much your income is.  If you don't file, you probably won't be audited, however you are breaking the law and should be aware of the consequences. Businesses do not pay income tax on money that they pay out as salary to their employees.  Businesses generally only pay income tax on profit. Profit is the money that comes in (revenue) minus the business expenses.  Payroll to the employees is a deductible business expense. As a resident of New York State you will, in addition to the Federal income tax handled by the IRS, be responsible for state and local income taxes. For New York the state tax forms are also used to determine your New York city tax. If HR was either not aware of the local tax requirement for New York or you filled out the New York State version of the W-4 incorrectly you may have had too little tax withheld for New York state. The refund from the IRS is not dependent on the refund/owe status for state and local taxes. It is possible that your state taxes are fine but that you owe taxes to the city. That tax you owe to the city will reduce the refund from the state and may require you to pay money to New York. Of course if you do itemize, what you pay to the state and city may result in deductions on your federal form. If you owe back taxes to the state or local government this could result in the IRS seizing a federal refund, but that doesn't happen right away. I would talk to your HMRC tax office they do have guidance on this issue here  http://www.hmrc.gov.uk/working/intro/employed-selfemployed.htm I would think that the real teeth here would be the IRS, should they look into it (and they should).  Splitting paychecks to avoid overtime also reduces taxes paid, which is large scale tax fraud, which generally leads to a sentence in gently-caress-my-bum-Federal-Penitentiary. I think you can. I went to Mexico for business and the company paid for it, so if you are self employed you should be able to expense it. The companies give jack shit about what the taxpayers have to pay. They only lower their own expenses. Without collective bargaining power, and forcing competing companies to have the same expenses, the employees will quite simply be screwed. Systems setup by the government on the other hand supply both.  Also, what about those without earned income... What do people deserve if they do not (currently or ever) contribute to the economy?  In part it depends on what kind of society one wants to live in, I guess, and whether the people are willing to keep the government functioning for the common good. "If a country had a genuine completely flat income tax system, then it wouldn't matter who paid the tax since it doesn't depend on the employee's other income. Since not many countries run this, it doesn't really make sense for the employee to ""take the burden"" of the tax, as opposed to merely doing the administration and paying the (probable) amount of tax at payroll, leaving the employee to use their personal tax calculation to correct the payment if necessary. Your prospective employer is probably saying that your tax calculation in Singapore is so simple they can do it for you. They may or may not need to know a lot of information about you in order to do this calculation, depending what the Singapore tax authorities say. If you're not a Singapore national, they may or may not be relying on bilateral tax agreements with your country to assert that you won't have to pay any further tax on the income in your own country. It's possible they're merely asserting that you won't owe anything else in Singapore, and in fact you will have taxes to report (even if it's just reporting to your home tax authority that you've already paid the tax). Still, for a foreign worker a guarantee you won't have to deal with the local tax authority is a good thing to have even if that's all it is. Since there doesn't appear to be any specific allowance for ""tax free money"" in the Singapore tax system, it looks like what you have here is ""just"" the employer agreeing to do something that will normally result in the correct tax being paid in your behalf. This isn't uncommon, but it's also not exactly what you asked for. And in particular if you have two jobs in Singapore then they can't both be doing this, since tax is not flat. The example calculation includes varying tax rates for the first X amount of income that (I assume without checking) are per person, not per employment. Joe's answer has the link. In practice in the UK (for example), there are plenty of UK nationals working in the UK who don't need to do a full tax return and whose tax is collected entirely at source (between PAYE and deductions on bank interest and suchlike). In this sense the employer is required by law to take the responsibility for doing the admin and making the tax payments to HMRC. Note that a UK employer doesn't need to know your circumstances in detail to make the correct payroll deductions: all they need is a so-called ""tax code"", which is calculated by HMRC and communicated to the employer, and which basically encodes how much they can pay you at zero rate before the various tax rate tiers kick in. That's all the employer needs to know here for the typical employee: they don't need to know precisely what credits and liabilities resulted in the figure. However, these employers still don't offer empoyees a net salary (that is, they don't take on the tax burden), because different employees will have different tax codes, which the employer would in effect be cancelling out by offering to pay two people the same net salary regardless of their individual circumstances. The indications seem to be that the same applies in Singapore: this offer is really a net salary subject to certain assumptions (the main one being that you have no other tax liabilities in Singapore). If you're a Singapore millionaire taking that job for fun, you might find that the employer doesn't/can't take on your non-standard tax liability on this marginal income." There are certain situations where you could legally pay yourself rent, but it'd be in the context of multiple business entities interacting, never in the context of an individual renting their own property.  Even if you could, any rent paid to yourself would count as rental income, so there'd be no benefit. Edit: I was hunting for examples where it might be acceptable, and didn't, but I found a good explanation as to why it is not acceptable from Brandon Hall on a BiggerPockets post: To get technical, you will be going up against the Economic Substance   Doctrine which states that a transaction has economic substance if:   (1) the transaction changes in a meaningful way (apart from Federal   income tax effects) the taxpayer’s economic position; and (2) the   taxpayer has a substantial purpose (apart from Federal income tax   effects) for entering into such transaction. By transferring your primary residence into a LLC, you would not be   changing your economic position. Further, you do not have a   substantial purpose for entering into such transaction other than to   simply avoid paying federal income taxes. So it might make sense if multiple people owned the LLC that owned the property you wanted to rent, and there are instances where company X owns holding company Y that owns an office building that company X rents space in. But if you're the sole player in the LLC's then it sounds like a no-go. "I did a little research and found this article from 2006 by a Villanova law professor, titled ""No Thanks, Uncle Sam, You Can Keep Your Tax Break"".  The final paragraph of the article says: Under these circumstances, it is reasonable to conclude that a taxpayer is not required to claim a allowable deduction unless a statutory provision so requires, or a binding judicial precedent so specifies. It would be unwise, of course, to forego a deduction that the IRS considers mandatory such as those claimed by self-employed individuals with respect to their self-employment,    whether for purposes of the self-employment tax or the earned income tax credit. Until the statute is changed or some other binding authority is issued, there is no reason taxpayers who wish to forego deductions, such as the dependency exemption deduction, should hesitate in doing so. (The self-employment tax issues in the quote cited by CQM are explicitly discussed in the article as one of a few special kinds of deduction which are mandatory.) This is not a binding statement: it's not law or even official IRS policy.  You could never use it as a defense in the event that this professor turned out to be wrong and the IRS decided to go after you anyway.  However, it is a clear statement from a credible, qualified source." @littleadv is right, this depends on your country. Furthermore, this is likely to depend on the type of business you own (in the US: LLC, S-corp, C-corp). In some countries you have to provide yourself a minimum wage if you are classified as a major shareholder and work for the company. When there is a minimum level of wage you have to pay yourself the tax rate on wages is typically higher than on dividends. The wage you then receive is taxed in line with normal wage taxation rules. Above the minimum wage you can pay yourself in dividends. "They are basically asking for the name of the legal entity that they should write on the check. You, as a person, are a legal entity, and so you can have them pay you directly, by name. This is in effect a ""sole proprietorship"" arrangement and it is the situation of most independent contractors; you're working for yourself, and you get all the money, but you also have all the responsibility. You can also set up a legal alias, or a ""Doing Business As"" (DBA) name. The only thing that changes versus using your own name is... well... that you aren't using your own name, to be honest. You pay some trivial fee for the paperwork to the county clerk or other office of record, and you're now not only John Doe, you're ""Zolani Enterprises"", and your business checks can be written out to that name and the bank (who will want a copy of the DBA paperwork to file when you set the name up as a payable entity on the account) will cash them for you. An LLC, since it was mentioned, is a ""Limited Liability Company"". It is a legal entity, incorporeal, that is your ""avatar"" in the business world. It, not you, is the entity that primarily faces anyone else in that world. You become, for legal purposes, an agent of that company, authorized to make decisions on its behalf. You can do all the same things, make all the same money, but if things go pear-shaped, the company is the one liable, not you. Sounds great, right? Well, there's a downside, and that's taxes and the increased complexity thereof. Depending on the exact structure of the company, the IRS will treat the LLC either as a corporation, a partnership, or as a ""disregarded entity"". Most one-man LLCs are typically ""disregarded"", meaning that for tax purposes, all the money the company makes is treated as if it were made by you as a sole proprietor, as in the above cases (and with the associated increased FICA and lack of tax deductions that an ""employee"" would get). Nothing can be ""retained"" by the company, because as far as the IRS is concerned it doesn't exist, so whether the money from the profits of the company actually made it into your personal checking account or not, it has to be reported by you on the Schedule C. You can elect, if you wish, to have the LLC treated as a corporation; this allows the corporation to retain earnings (and thus to ""own"" liquid assets like cash, as opposed to only fixed assets like land, cars etc). It also allows you to be an ""employee"" of your own company, and pay yourself a true ""salary"", with all the applicable tax rules including pre-tax healthcare, employer-paid FICA, etc. However, the downside here is that some money is subject to double taxation; any monies ""retained"" by the company, or paid out to members as ""dividends"", is ""profit"" of the company for which the company is taxed at the corporate rate. Then, the money from that dividend you receive from the company is taxed again at the capital gains rate on your own 1040 return. This also means that you have to file taxes twice; once for the corporation, once for you as the individual. You can't, of course, have it both ways with an LLC; you can't pay yourself a true ""salary"" and get the associated tax breaks, then receive leftover profits as a ""distribution"" and avoid double taxation. It takes multiple ""members"" (owners) to have the LLC treated like a partnership, and there are specific types of LLCs set up to handle investments, where some of what I've said above doesn't apply. I won't get into that because the question inferred a single-owner situation, but the tax rules in these additional situations are again different." "In the United States, with an S-Corp, you pay yourself a salary from company earnings.   That portion is taxed at an individual rate.  The rest of the company earnings are taxed as a corporation, which often have great tax benefits.  If you are making over $80K/year, the difference can be substantial.  A con is that there is more paperwork and you have to create a ""board"" of advisors." As others have mentioned yes it is taxable. Whether it goes through payroll and has FICA taken out is your issue in terms that you need to report it and you will an extra 7.5% self employment taxes that would normally be covered by your employer. Your employer may have problems but that isn't your issue.  Contrary to what other users are saying chances are there won't be any penalties for you. Best case you have already paid 100% of last years tax liability and you can file your normal tax return with no issues.  Worst case you need to pay quarterly taxes on that amount in the current quarter. IRS quarters are a little weird but I think you need to pay by Jan 15th for a December payment. You don't have to calculate your entire liability you can just fill out the very short form and attach a check for about what you will owe. There is a form you can fill out to show what quarter you received the money and you paid in it is a bit more complex but will avoid the penalty. For penalties quarterly taxes count in the quarter received where as payroll deductions count as if they were paid in the first quarter of the year. From the IRS The United States income tax is a pay-as-you-go tax, which means that tax must be paid as you earn or receive your income during the year. You can either do this through withholding or by making estimated tax payments. If you do not pay your tax through withholding, or do not pay enough tax that way, you might also have to pay estimated taxes. If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.