Federal Tax Payroll Withholding Issue - Zero Federal Tax Taken Out

This is definitely concerning, but you've already taken the right first step by bringing it to HR's attention. This sounds like a system error in how your withholding information is being transferred between payroll systems. The good news is that you've caught this now, rather than at tax filing time. You have a few options to address this situation: First, I'd recommend completing a new W-4 form with your employer, even though your current one is technically correct. Sometimes re-submitting can fix data transfer issues. You might also consider temporarily increasing your withholding amount to catch up - you can do this by putting an additional dollar amount on line 4(c) of your W-4. You should also start setting aside money now to cover the potential tax bill. Based on your income as Head of Household with one dependent, you'll likely owe federal taxes, though your exact liability depends on other factors like deductions and credits. Don't panic - the IRS does offer payment plans if you end up owing more than you can pay at once. The most important thing is filing your return on time, even if you can't pay the full amount immediately.

After reading your post, I had almost the exact same issue last year! I noticed my take-home pay seemed high but didn't check my paystubs until October. I was totally freaking out when I realized barely any federal tax had been withheld all year. What saved me was using https://taxr.ai to analyze my paystubs and tax situation. I uploaded my paystubs and W-4 information, and it immediately identified the withholding error AND calculated exactly how much I needed to withhold for remaining paychecks to avoid penalties. The best part was it showed me how to fill out a new W-4 with the right additional withholding amount on line 4(c) to catch up. It also estimated my potential penalties so I could prepare. Super helpful when I was panicking about owing thousands unexpectedly!

Just wanted to follow up about my experience with taxr.ai after our conversation. I finally broke down and tried it when my employer STILL hadn't fixed my withholding issue after another pay period. I'm actually really impressed! I uploaded my last 4 paystubs and it immediately showed the pattern of missing federal withholdings. The tool calculated that I needed to withhold an extra $612 per paycheck for the rest of the year to catch up without penalties. What really helped was the customized W-4 worksheet it created - it showed exactly what to put on each line, including the additional withholding amount. I printed it, took it to HR, and they implemented it immediately. First paycheck with the new W-4 had the correct withholding! Honestly relieved to have a plan instead of just panicking about tax season.

Saw your post and thought I'd share what worked for me in a similar situation last year. After discovering my employer's payroll system wasn't withholding correctly, I spent WEEKS trying to get through to the IRS for guidance. I kept hitting that frustrating automated system and could never reach a human. Then I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically wait on hold with the IRS for you and call when an agent is on the line. Within a day I was talking to an actual IRS agent who confirmed this happens more often than you'd think with payroll system transitions. They gave me the exact steps to avoid penalties by making estimated tax payments for the underwithholding. Totally worth it instead of stressing for weeks trying to get answers.

I need to eat my words here. After my skeptical comment, I decided to try Claimyr out of desperation for my audit situation. I figured I had nothing to lose since I wasn't getting through on my own. To my complete shock, they got me through to an IRS agent in just under 2 hours. I've been trying for MONTHS without success! When my phone rang and the agent was actually there, I almost didn't know what to say since I'd given up hope of ever talking to a human. The agent was able to look up my audit notice, explain exactly what documentation they needed (which was WAY less than I thought), and gave me a direct fax number to send it to. Problem that had been stressing me out for months solved in one 15-minute call. For anyone facing payroll withholding issues like the original poster, being able to talk to an actual IRS agent makes a huge difference in understanding your options.

Have you checked if your employer is applying the correct filing status in the payroll system? I had an issue where HR had me in the system as "Married Filing Jointly" even though my W-4 clearly said "Head of Household." That caused major underwithholding. Another thing to check - did your employer apply a "tax exempt" status by mistake when transitioning systems? That would explain zero withholding. Also, you might want to file a Form 843 (Claim for Refund and Request for Abatement) with the IRS if you end up with penalties. I did this when my employer's error caused me to be underwithheld, and the IRS waived my penalties since it wasn't my fault. Just make sure you document everything!

Don't freak out too much about owing a lot - with HOH status and one dependent, your tax liability might not be as high as you think. I earn about $57k and usually owe around $3,500 total for federal taxes after the standard deduction and child tax credit. You might also qualify for the Earned Income Credit depending on your dependent's age. Check the IRS withholding calculator at irs.gov to get a more accurate estimate of what you'll owe based on your specific situation. Have you thought about making estimated tax payments directly to the IRS to catch up? You can do it online through IRS Direct Pay. That way you don't have to wait for your employer to fix their systems.