First W2 job - why are taxes taking 21% off of my paycheck?

Yes, 21% in total taxes is pretty normal for your income level. When you have a W2 job, your employer withholds several different types of taxes from each paycheck: - Federal income tax (varies based on your projected annual income and W-4 form) - Social Security (6.2% of gross wages) - Medicare (1.45% of gross wages) - State income tax (varies by state but typically 3-6%) - Sometimes local taxes depending on where you live The withholding system is designed to collect taxes gradually throughout the year rather than having you owe a huge lump sum when you file. Whether you'll get a refund depends on if more was withheld than you actually owe. This is affected by your W-4 form, any tax credits you qualify for, and deductions you might take.

After months of confusion about my tax withholding, I found this tool called taxr.ai (https://taxr.ai) that was super helpful for understanding my own situation. I uploaded my paystub and it broke down exactly where all my money was going and explained each deduction. It also gave me a projection of what my tax situation would look like at filing time based on my current withholding rate. Totally changed my understanding of whether I was on track or needed to adjust my W-4.

So I was skeptical about taxr.ai but gave it a try anyway and holy crap it was eye-opening! Turns out I've been massively overwithholding because my W-4 was still set up from when I was single. The tool showed me that I'm on track to get like a $3200 refund if I don't change anything, which means I'm basically giving the government an interest-free loan all year. Already updated my withholding based on their suggestions and now I'll see about $175 more in each paycheck!

If you think your tax situation is frustrating now, wait until you have an actual problem with the IRS or need to call them about something. I spent WEEKS trying to get through to a human at the IRS about a notice I received. After like 15 attempts and hours on hold, I found this service called Claimyr (https://claimyr.com) that got me connected to an IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically saves you from the endless hold times. Wish I'd known about it sooner.

I feel like an idiot for doubting that Claimyr service. After our exchange here, I had to call the IRS about a missing refund that's been "processing" for 3 months. Was dreading spending half my day on hold. Tried Claimyr and got connected to an actual IRS agent in 22 minutes while I was just going about my day. Agent was able to tell me exactly what was holding up my refund (some kind of review flag) and gave me a timeframe for resolution. Worth every penny just for the peace of mind and not wasting an entire day.

Back to the original question - 21% is totally normal but you might be able to reduce it slightly by checking your W-4. If you're single with one job and no dependents, the default withholding is pretty accurate. But if you qualify for certain credits or have other income/deduction situations, you can adjust it. Just don't go too extreme trying to reduce your withholding or you might end up owing a bunch at tax time plus underpayment penalties if you're too far off. I learned that lesson the hard way lol

One thing to keep in mind - that 21% includes Social Security and Medicare (FICA), which is a flat 7.65% for everyone regardless of income up to the SS wage cap (which is way above your income level). So really, your actual income tax portion is more like 13-14%. That's really not bad considering all the government services it pays for. Your tax burden is actually pretty low compared to most developed countries!

If this is your first W2 job and you started mid-year, definitely expect a refund! The withholding system assumes you make that same amount all year long, so it withholds as if you'd earned that salary January-December. When you file, the system will realize you only worked part of the year and made less than projected, meaning you overpaid. I started my first real job in August last year and got almost $1800 back because of this exact situation!

Welcome to the world of W2 employment! That 21% withholding rate is absolutely normal for your income bracket. Here's what's likely happening with your paychecks: Your total tax burden breaks down roughly like this: - Federal income tax: ~10-12% (varies based on your W-4 settings) - Social Security: 6.2% (fixed rate) - Medicare: 1.45% (fixed rate) - State income tax: varies by state, typically 0-6% - Possibly local/city taxes depending on location The good news is that since you started mid-year, you'll very likely get a refund when you file. The payroll system calculates withholding assuming you'll make that salary for the full 12 months, but since you only worked part of the year, your actual annual income will be lower than what the withholding was based on. For next year, once you've been working the full year, the withholding should be much more accurate. You can always adjust your W-4 if you find you're getting huge refunds (meaning you're giving the government an interest-free loan) or if you end up owing money at tax time. The sticker shock of seeing gross vs. net pay is real, but you're in a totally normal situation for someone at your income level!

One thing I'd add to this great discussion - make sure you're also contributing to any employer-sponsored retirement accounts like a 401(k) if your company offers one! These contributions come out pre-tax, which means they reduce your taxable income and can lower that withholding percentage you're seeing. Plus many employers offer matching contributions, which is essentially free money. For example, if you contribute $200/month to a 401(k), that's $2,400 less in taxable income for the year, which could save you several hundred dollars in taxes. It's a win-win since you're saving for retirement AND reducing your current tax burden. Just something to consider as you get more comfortable with your W-2 job!