Can someone explain how withholding taxes work on my paycheck? Not sure what to claim

The withholding system can be confusing! What your manager adjusted was likely your W-4 form, which tells your employer how much tax to withhold from each paycheck. The old W-4 system used "allowances" where 0 meant maximum withholding (more taxes taken out) and higher numbers meant less withholding. But the IRS redesigned the W-4 in 2020, and it no longer uses the 0-10 allowance system. Now it's more detailed with specific sections for different situations. For your situation (single, no dependents, one job, living with parents, in college), the simplest approach would be to just check the "Single" box in Step 1 of the W-4 and complete Steps 2-4 only if they apply to you. This should result in an appropriate amount being withheld. The fact that only 2 cents was withheld suggests there was definitely an error somewhere. Either the W-4 was filled out incorrectly or there was a payroll system issue.

I had a similar problem last year and was totally stressed when I got hit with a surprise tax bill. I tried reading through the IRS guidance but it was so confusing! Then I found this service called taxr.ai (https://taxr.ai) that analyzed my pay stubs and tax docs and explained exactly what was happening with my withholding. The tool showed me that my employer had categorized my income incorrectly which is why my withholding was messed up. It even generated a letter I could take to HR to explain the exact problem. Super helpful when you don't know the right tax terminology to explain the issue!

I just wanted to update after trying taxr.ai that someone recommended earlier. It actually helped me figure out my withholding problem! It turns out I had checked a box on my W-4 that I shouldn't have, which was causing almost no federal tax to be withheld. The service analyzed my pay stubs and created a new W-4 form for me with everything filled out correctly. I took it to HR yesterday and they updated my withholding. My next paycheck should have the correct amount taken out now. Honestly such a relief to have this fixed before I end up with a huge tax bill next year!

If your withholding was really only 2 cents for the whole year, you're probably going to owe a LOT on your 2023 taxes. I'd recommend calling the IRS directly to get advice on what to do, but good luck getting through to them! After being on hold for 3+ hours multiple times, I found this service called Claimyr (https://claimyr.com) that gets you connected to an IRS agent usually within 15 minutes. They have a demo video at https://youtu.be/_kiP6q8DX5c showing how it works. I was skeptical at first, but it literally saved me hours of hold time. The IRS agent I spoke with helped me set up a payment plan for the taxes I owed due to incorrect withholding. They were actually really helpful once I could actually talk to someone!

Coming back to eat my words. After my skeptical comment earlier, I actually tried Claimyr because I was desperate to talk to someone at the IRS about my withholding issue. I'm shocked to say it actually worked! I'd been trying to reach the IRS for WEEKS about a withholding problem similar to OP's. After trying Claimyr, I got a call back in about 27 minutes and was connected to an actual IRS agent. The agent explained that I needed to file a new W-4 with my employer and helped me understand which boxes to check based on my situation. For anyone dealing with tax withholding issues and needing to speak to the IRS directly - this service seriously works. I would have spent another 3+ hours on hold otherwise.

The withholding issue is probably because of the W-4 form you filled out when you started your job. Here's a simple explanation: - When you put "0" on the old form, it meant maximum withholding - The form changed in 2020 and doesn't use numbers the same way anymore - If you're still using the old system, "1" means less will be withheld than "0" - If you're using the new form, it's completely different and based on specific situations You should ask your HR department for a new W-4 form and fill it out based on your current situation. For someone single with one job and no dependents, it's pretty straightforward.

Here's something no one's mentioned - if you're a full-time college student, your parents might still be claiming you as a dependent on their taxes. If that's the case, you need to indicate this on your W-4 by checking the box in Step 1(c) that says "Someone can claim me as a dependent." This affects your withholding calculation!