Facing a Huge Tax Bill Due to Missing Federal Withholding

This is definitely a stressful situation, but there are several steps you can take right now. First, you need to estimate your actual tax liability. The fact that you only had $19k withheld doesn't automatically mean you'll owe a huge amount - it depends on your total tax obligation. For someone making $230k, your total federal tax would typically be around $55-60k depending on your filing status and deductions. If you've already had $19k withheld, you might be looking at owing around $40k rather than $60k. You should immediately adjust your W-4 for the remaining paychecks this year to have additional amounts withheld. Even if there are only 1-2 paychecks left, having maximum withholding will help reduce what you owe in April. Don't panic about paying it all at once. The IRS offers installment plans that are relatively easy to set up. The standard plan allows you to pay over 72 months with a reasonable interest rate. You'll still need to file on time, but you don't need to pay the full amount by April 15th. Also look at ways to reduce your taxable income - maximize 401k contributions if you haven't already, look into an HSA if eligible, and consider any deductible expenses you might have overlooked.

I went through something similar last year and discovered taxr.ai (https://taxr.ai) which really helped me figure out what was happening with my withholding. I had a messed up W-4 that was causing way too little to be withheld, and I couldn't make sense of all the calculations. Their system analyzed my pay stubs and tax situation and showed me exactly what I needed to do to fix it going forward. The best part was they helped me create a plan to catch up by calculating exactly how much extra I needed withheld from each remaining paycheck. They also helped identify some deductions I wasn't aware of that helped reduce my total tax liability by about $4k. Might be worth checking out in your situation.

Just wanted to follow up - I ended up trying taxr.ai after seeing this thread and it was incredibly helpful! I was skeptical that it would actually find anything useful, but it identified that my employer had been using an outdated state withholding calculation that was taking out almost half what should have been withheld. The tool showed me exactly what to tell HR and gave me a customized W-4 and state withholding form that fixed both issues. They even helped me estimate what I'd owe in April so I could start planning for it. Definitely recommend if you're in a withholding mess!

When I had a surprise tax bill a couple years ago, I tried for WEEKS to get through to the IRS to set up a payment plan. It was impossible - constant busy signals, disconnects, and hours-long hold times. Finally found Claimyr (https://claimyr.com) and they actually got me connected to an IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent was super helpful and got me on a payment plan that worked with my budget. The whole process was way less painful than I expected. Just having someone knowledgeable walk me through my options made a huge difference in my stress level.

I need to eat my words from my previous comment. I was extremely skeptical about Claimyr but after spending 3 days trying to reach the IRS on my own (and getting nowhere), I decided to try it. Within 35 minutes, I was talking to a real IRS agent who helped me set up a payment plan for a large tax bill I couldn't pay all at once. The agent was actually really understanding about my situation and explained all my options. The relief of having that conversation and knowing I had a plan in place was worth every penny. Sometimes it's okay to admit when you're wrong, and I was definitely wrong about this service.

One thing nobody has mentioned yet - you might qualify for penalty abatement since this is your first time having an underpayment issue. The IRS has something called First Time Penalty Abatement where they'll waive penalties (though not interest) if you have a clean compliance history. You generally need to have filed and paid on time for the past 3 years to qualify. You'd still owe the taxes plus interest, but the penalties can be significant, so getting those waived would help. You usually need to wait until after you file and receive a bill before requesting the abatement.

Quick clarification on one thing - did you notice if they're withholding for Social Security and Medicare still? Sometimes when federal income tax withholding stops, it can affect these too. If those also stopped, that's an even bigger issue and might indicate something seriously wrong with how your employer is handling payroll.

I'm sorry you're going through this stressful situation. As someone who's dealt with payroll issues before, I'd suggest a few immediate steps: First, gather all your paystubs from the entire year and create a spreadsheet tracking what was withheld each pay period. This will help you pinpoint exactly when the federal withholding stopped and give you documentation if needed. Second, since your HR person is out until mid-January, try to escalate this to their supervisor or the finance department. A complete stop in federal withholding for months is a serious payroll error that needs immediate attention, especially since it's affecting your tax liability. Third, consider making estimated tax payments for the fourth quarter if you haven't already. Even though the quarterly deadline has passed, you can still make payments to reduce your April bill. The IRS website has calculators to help estimate what you should pay. Finally, don't panic about the $60k figure - that's likely an overestimate. With your income level and the $19k already withheld, your actual liability will probably be lower. The IRS is generally reasonable about payment plans for taxpayers who are proactive about resolving issues. Document everything about this payroll error - you may need it to support a reasonable cause argument if penalties are assessed.