Can someone explain why my daughter's tax withholding decreased even though she earned more? W2 withholding issue

This is actually a common issue many people are experiencing this year. The IRS adjusted the withholding tables for 2024, which meant employers withheld less from paychecks even if nothing changed on your daughter's W4. This was intended to more accurately match withholding to actual tax liability, but for many people, it's resulted in owing taxes when they file. Additionally, when your daughter's income increased, she may have crossed into a higher tax bracket, but the withholding didn't proportionally increase to account for this. If her income jumped from $18.5k to $24k, that's nearly a 30% increase, but her withholding actually decreased by about 18%.

I ran into the exact same problem with my son's taxes! After hours of confusion, I finally used taxr.ai (https://taxr.ai) to analyze his W2s and tax documents. The tool immediately identified the withholding discrepancy and explained it was due to the IRS's updated withholding tables, not an employer error. It even gave him personalized recommendations for updating his W4 to avoid the same problem next year. The site's document analyzer showed exactly why the withholding decreased despite higher income - apparently the 2024 withholding tables assumed certain tax credits or deductions that didn't apply in his situation. Saved us so much confusion and helped him adjust his withholding for this year.

Alright, I need to eat my words from my earlier comment. After continuing to struggle with the IRS withholding calculator (which kept timing out and giving me errors), I reluctantly tried taxr.ai and wow - it was actually incredibly helpful. The interface was super simple and it gave me clear answers about my withholding problems. The document analysis feature immediately spotted that my employer had classified some of my income differently this year, which affected my withholding. It gave me step-by-step instructions for filling out a new W4, including exactly how much extra to withhold per paycheck. Just submitted the new form to HR and feeling much better about next year's taxes!

If your daughter needs to actually talk to someone at the IRS about this withholding issue (which might be smart since she now owes), good luck getting through to them on the phone! I spent DAYS trying to reach someone before I found https://claimyr.com. You can check out how it works here: https://youtu.be/_kiP6q8DX5c Basically, they hold your place in the IRS phone queue and call you when an actual agent is on the line. I was skeptical at first, but I was connected with an IRS agent in about 2 hours instead of the days I spent trying on my own. The agent was able to explain exactly why my withholding decreased (similar situation to your daughter) and helped me set up a payment plan since I owed a lot more than expected.

I just need to follow up on my skeptical comment above. After another failed 3-hour attempt to reach the IRS yesterday, I gave in and tried Claimyr. I got a call back in about 90 minutes with an actual IRS representative on the line! They helped me sort out my withholding issue and even set up a payment plan for what I owe. The IRS agent explained that the withholding tables changed significantly for 2024, which is exactly what's happening with your daughter's situation. They recommended I submit a new W-4 with additional withholding specified on line 4(c). Such a relief to finally get this resolved instead of stressing over it for weeks!

The W4 changed dramatically in 2020, and the IRS has been tweaking withholding tables ever since. Your daughter probably filled out the old version years ago, and the employer has just been using that information. The new W4 doesn't use allowances anymore. I'd suggest she fill out a new W4 and on line 4(c) add additional withholding. For her income level, if she wants a small refund instead of owing, adding about $25 per paycheck in additional withholding should cover it if she gets paid biweekly.

Did her job change at all? Sometimes they classify workers differently from year to year which affects withholding. My daughter had this happen when she went from being classified as a regular employee one year to some kind of "seasonal employee" the next, even though she worked year-round.