The dependent he was claiming on payroll was for a minor child, which the judge had given the deduction for her to his ex wife as part of the divorce decree.====>>I should say it depends; under some circumstances,he, as a noncustodial parent, can claim the child as a dependent for tax purposes on W4; there are 2 ways in which a noncustodial parent can claim a child as a dependent: the custodial parent signs a Form 8332 which the noncustodial parent attaches to his tax return or the divorce decree, separate maintenance or written separation agreement states that the noncustodial parent shall be entitled to claim a child as a dependent.None of the two ways applies to him, then no he can not claim the child as his dependent; however, on his W4, he can claim as many as he'd like if he doesn't mind paying a big tax bill at the end of the year, including penalties for under-withholding. The best option for him is always to follow the instructions on the W-4 carefully, to the letter, and put down the result he gets.
So my theory is that by claiming a deduction for a child he was not intitled to when determaining his take home pay from payroll, then by filing corectly as single no deductions on his income tax he recieved more weekly pay and created a larger than normal tax bill at the end of 2014.=====>Correct; allowances roughly correspond to the exemptions he claims on his annual tax return. As of tax year 2014, each allowance shelters $3.95K of your annual income from the employer's withholding calculation.
Knowing that the corporation takes distributions to the highest tax bill, he in effect recieved more pay, payed less in tax and stuck the corporation for the 6000. Does this make sense......=====>>he in effect received more take home pay by claiming the child as his allowance on his W4 and this means that he may need to pay a big tax bill at the end of the year, including penalties for under-withholding. If he has too little tax withheld on the job, or has income from sources where no tax is withheld, he could be hit with penalties and interest charges for underwithholding.There is no penalty to the employer if they are complying with the law.