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Pedro Sawyer

No federal income tax being withheld from paycheck - what do I need to do?

I just noticed something alarming with my paychecks at my new job. I'm three checks in and there's no federal income tax being withheld! They're taking out Social Security, Medicare and state taxes, but nothing for federal income tax. I filled out my W4 as Single and put either 0 or 1 for exemptions (honestly can't remember which). Is there some reason why federal taxes aren't being withheld? I'm really worried because I can't afford to pay a huge amount at tax time or any penalties. I just started this job about six weeks ago and didn't catch this until now. How do I fix this situation? Can I adjust my W4 to make up for the missed withholding? Will I definitely owe penalties next April? I'm freaking out a little because I definitely need this job but can't afford a big tax hit next year!

Mae Bennett

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You need to talk to your payroll department ASAP. This is likely a mistake in how your W4 was processed or entered into their system. The good news is that since you've only been there for about six weeks, the amount of "catch-up" withholding won't be too painful. Ask your employer for a new W4 form, and when you fill it out, make sure to select "Single" filing status. Since the 2020 revision of the W4, there aren't "allowances" anymore, but you can request additional withholding by filling out line 4(c) with an extra amount to be withheld from each check. This can help you make up for the missed withholding. The sooner you fix this, the better. You shouldn't face penalties as long as you fix it now and either have enough withheld for the rest of the year or make estimated tax payments to cover your liability.

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If they do owe at tax time, how much would the penalty typically be? I had a similar issue last year and ended up owing but wasn't sure if the extra I paid was a penalty or just the taxes I should have had withheld.

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Mae Bennett

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The penalty is typically about 0.5% of the unpaid tax per month, up to 25% of the unpaid amount. However, there's a "safe harbor" provision that can help avoid penalties. You generally won't face a penalty if you pay at least 90% of your current year tax through withholding/estimated payments, or 100% of last year's tax (110% if your income is over $150,000). Since you've only missed a few paychecks worth of withholding, if you correct it now and maybe add a bit extra on line 4(c) of your W4, you should be able to avoid any penalties completely.

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Melina Haruko

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I had almost the exact same issue last year! I was freaking out just like you are. I found this amazing tool at https://taxr.ai that analyzes your payroll documents and tells you exactly what's wrong with your withholding. It spotted that my employer had accidentally categorized me as "exempt" even though I never checked that box. The tool showed me exactly how to fill out a new W4 to fix the problem AND how much extra to withhold each check to make up for the missing amounts. What I really liked was seeing the side-by-side comparison of what I should be paying vs what was actually being withheld. Gave me major peace of mind knowing exactly what to fix.

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Does it work if you're a contractor? I get 1099s instead of W2s and I'm always confused about how much I should be setting aside.

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Reina Salazar

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I'm skeptical of online tax tools. How does it actually access your payroll info? Seems risky to upload financial docs to some random website.

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Melina Haruko

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For contractors, absolutely! The tool has a specific section for 1099 income that helps calculate your quarterly estimated payments based on your specific situation. It factors in both income tax and self-employment tax so you know exactly what to set aside. I had the same concern about security. They use bank-level encryption and don't store your documents after analysis. You just upload your paystubs so it can see the withholding patterns. All the data stays on your device during the calculation process. I was nervous too but it's actually safer than most tax prep software I've used.

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Reina Salazar

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Just wanted to update after trying taxr.ai from the recommendation above. It actually worked really well for my situation! I was in a similar boat with almost no federal withholding happening. The tool showed me that my employer had entered my W4 incorrectly and marked me as having multiple jobs when I don't. I printed out the custom W4 it generated, took it to HR, and they fixed the issue immediately. The best part was seeing exactly how much extra I needed to withhold per check for the rest of the year to avoid underpayment penalties. Way more straightforward than trying to figure it out myself using the IRS withholding calculator.

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If your payroll department isn't responsive or helpful (mine wasn't!), you might need to talk directly to the IRS to understand what's happening. I spent WEEKS trying to reach someone until I found https://claimyr.com - they got me connected to an actual IRS agent in about 20 minutes instead of waiting on hold for hours. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that my employer had miscoded my filing status despite my W4 being filled out correctly. She walked me through exactly what to tell payroll to fix it and gave me documentation to back it up. Sometimes you need that official IRS guidance to get payroll departments to take action.

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Demi Lagos

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How exactly does this service work? Like, are they just calling the IRS for you or what? Seems weird someone could get you through faster than calling yourself.

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Mason Lopez

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This sounds like BS honestly. Nobody can magically get through the IRS phone tree. I've tried calling dozens of times and always get disconnected after 1-2 hours on hold. If this actually worked, everyone would use it.

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They use a technology that monitors the IRS phone lines and holds your place in line automatically. When an agent is almost ready to take your call, they call you back and connect you. It's basically professional-level hold management - much more sophisticated than just repeatedly calling. The reason it works better than calling yourself is they're constantly monitoring multiple lines and can identify the shortest wait times across different IRS departments. When I used it, I got a call back in about 15 minutes saying they had secured my place in line, and then about 5 minutes later I was talking to a real person. I was honestly shocked too, but it absolutely works.

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Mason Lopez

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I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it because I was desperate to resolve my withholding issue before year-end. The service actually worked exactly as described. Got connected to an IRS representative in about 25 minutes instead of the 3+ hours I was spending on hold previously (when I could even get through at all). The agent confirmed that my employer had incorrectly processed my W4 by checking some box in their payroll system. They gave me specific language to use with HR that finally got them to take it seriously. For anyone in a similar situation with payroll withholding problems, being able to cite exactly what the IRS says makes a huge difference in getting it fixed quickly.

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Vera Visnjic

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Your employer might have entered your W4 wrong, but also check if you're making so little money that you fall below the threshold for federal tax withholding. If your annualized income is less than the standard deduction (which is $13,850 for single filers in 2023), then you wouldn't owe federal income tax and nothing would be withheld.

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Pedro Sawyer

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That's an interesting point. I'm making about $2,600 per month, so annually that would be around $31,200. That's definitely above the standard deduction, right? So I should be having federal taxes withheld?

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Vera Visnjic

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At $31,200 annually, you're well above the standard deduction threshold. You should definitely be having federal income tax withheld. Based on that income level for a single person, you'd expect to see roughly $150-200 per month in federal withholding depending on your specific situation. This confirms it's almost certainly an error in how your W4 was processed. Take a new W4 to your payroll department immediately and make sure they understand it needs to be fixed. Consider requesting additional withholding on line 4(c) to make up for what's been missed so far.

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Jake Sinclair

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Check your pay stub carefully to make sure "exempt" isn't checked somewhere. Sometimes if you write "EXEMPT" on your W4 (which you should only do if you had no tax liability last year and expect none this year), payroll will not withhold any federal income tax.

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This happened to me! HR had checked "exempt" by mistake, and I didn't notice for 3 months. Had to have extra withholding taken out for the rest of the year to catch up.

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