OASDI & Medicare Tax Withholding on Gross Pay vs. After Deductions

Wait, so my health insurance premiums should have FICA taxes taken out, but my HSA contributions shouldn't? How do I tell if they're doing the HSA part correctly? The paystub just shows one big OASDI amount and one Medicare amount.

Your health insurance premiums being subject to FICA is indeed correct - that's how the tax code works. For your HSA contributions, you'd need to check the taxable wage base they're using for the FICA calculation. Look for a line that shows "FICA wages" or "Social Security wages" or something similar on your paystub. That number should be your gross wages minus HSA contributions (but still including your health insurance premiums). If that reduced amount is what they're calculating the 6.2% and 1.45% on, then it's correct. If they're using your complete gross amount without subtracting HSA, then you should definitely talk to payroll.

Does taxr.ai just analyze paystubs or can it handle other tax documents too? I've been having issues with figuring out if my quarterly estimated tax payments are correct since I started freelancing.

I'm kinda skeptical about using these online tools with my financial info. How secure is it? And do they save your documents forever or what?

It handles pretty much any tax document you throw at it - W-2s, 1099s, even complete tax returns. For your freelance situation, it could definitely help with analyzing if your quarterly payments align with your actual income and deductions. It's been super helpful for understanding my tax obligations when income fluctuates. The security is actually why I chose it over other options - they use bank-level encryption and don't store your documents after analysis unless you specifically create an account and choose to save them. You can do a one-time analysis without creating an account, and everything is deleted after you close the session. It gave me a lot more peace of mind than sending my docs to a random tax preparer.

Wait how does this even work? I thought the IRS phone lines were just permanently jammed and there was no way around it. Does this actually get you to a real person or just another automated system?

Sounds like a scam. I seriously doubt anyone can magically get through the IRS phone lines when millions of people can't. What's the catch here?

It absolutely gets you through to a real IRS agent - not another automated system. It works because their system continuously redials and navigates the phone menus for you instead of you having to do it manually. When they reach a human agent, they connect the call to your phone. It's basically like having someone wait on hold for you. There's no magic to it - just technology handling the tedious part. They don't have special access to the IRS or anything like that. They're just using an automated system to handle what would normally take hours of your time. I was skeptical at first too, but when I got connected to an actual IRS agent who resolved my issue, I was sold on the service.

Wait, 401(k) contributions are subject to FICA? I always assumed they weren't since they're pre-tax for income tax purposes. Is that why my OASDI and Medicare withholding seems so high compared to my taxable wages?

Yes, that's exactly why your FICA taxes seem high compared to your taxable wages! 401(k) and 403(b) contributions reduce your income for federal and state income tax purposes, but they do NOT reduce your income for FICA (Social Security and Medicare) taxes. This is one of the most misunderstood aspects of payroll taxes. So while you're saving on income taxes with your 401(k) contributions, you're still paying the full 7.65% FICA tax on that money. This is intentional in the tax code - you pay FICA taxes on retirement contributions because you'll eventually receive Social Security benefits based on those earnings.

That's the Additional Medicare Tax that kicks in when your income exceeds $200,000 if you're single (or $250,000 if married filing jointly). The regular Medicare tax is 1.45%, but when you hit that threshold, an additional 0.9% is added, bringing the total to 2.35% on the portion of your income above that threshold. If this is the first time you're seeing it, congratulations on the higher income! It only applies to the amount over the threshold, not your entire income.

Welcome to the confusion club! I just went through the exact same thing when I started my current job six months ago. The difference between how income tax and FICA taxes treat pre-tax deductions is honestly one of the most confusing aspects of payroll. What really helped me was creating a simple spreadsheet to track my gross pay, each type of deduction, and then seeing how they affected different tax calculations. It made it crystal clear why my "taxable wages" for federal income tax was one number, but my "Social Security wages" was different. Also, don't feel bad about not understanding this stuff immediately - I've been working for 15+ years and only really figured this out recently when I started maximizing my HSA contributions. The fact that HSA contributions are triple tax-advantaged (deductible, growth tax-free, withdrawals tax-free for medical expenses) but 401(k) contributions still get hit with FICA taxes is just one of those quirky tax code things that nobody explains when you're starting out. You're definitely on the right track checking your paystub carefully. Better to catch any errors now than deal with them at tax time!

Government payroll systems can definitely be "quirky" - that's putting it nicely! I work for a state agency and it took our payroll department three months to correctly handle my HSA contributions when I first enrolled. They kept including them in my FICA wages even after I pointed out the error multiple times. What finally worked was printing out the relevant IRS publication (Publication 969) that specifically states HSA contributions are exempt from FICA taxes and highlighting the exact section. Sometimes you have to do their homework for them unfortunately. Once I showed them the black-and-white IRS guidance, they fixed it immediately and even processed a correction for the previous months. The taxr.ai tool sounds really helpful for having that documentation ready. Government employees definitely need to be extra vigilant about payroll accuracy since these systems often haven't been updated in decades!

This is such valuable information! I had no idea about the Social Security wage base limit changing each year. I've been wondering why my OASDI withholding seemed to stop midway through last year when I got a big bonus - now I understand it was because I hit that annual limit. The idea of keeping a running tally of FICA wages is brilliant. I'm definitely going to start tracking this more carefully, especially since I just increased my HSA contributions this year. It's frustrating that we as employees have to become payroll experts just to make sure we're not overpaying taxes, but I guess that's the reality with these complex systems. Thanks for breaking down the specific numbers - having the actual 2025 wage base limit ($160,200) is super helpful for planning. I'm nowhere near that threshold yet, but it's good to know for future reference!

Welcome to the federal employee payroll confusion club! The TSP vs FICA distinction you mentioned is one of those things that catches everyone off guard initially. I went through the exact same bewilderment when I started with the government years ago. One thing to watch out for with your HSA - make sure you understand the coordination between your FEHB plan and HSA eligibility. Not all FEHB plans are HSA-compatible (they need to be High Deductible Health Plans), so double-check that your chosen plan qualifies before you start contributing. The last thing you want is to discover months later that your contributions weren't eligible and now you owe penalties. Also, since you're new to federal service, you might want to familiarize yourself with how the different tax treatments affect your retirement planning. The fact that TSP contributions still get hit with FICA taxes while HSA contributions don't can actually influence your contribution strategy, especially if you're trying to maximize tax efficiency. The "vintage" payroll systems comment made me laugh - some of these government systems definitely feel like they were designed in the stone age! Having independent verification tools is absolutely essential.

Welcome to the working world! Your frustration is totally understandable - it's crazy that they don't teach this stuff in school when it affects literally every working person. I remember feeling the exact same way when I got my first job and saw all these different tax calculations that made no sense to me. The 401(k) vs FICA thing is probably the most counterintuitive part of payroll taxes. It seems logical that if something reduces your income tax, it should reduce all your taxes, but the government designed it differently. The reasoning is that since you'll eventually get Social Security benefits based on your earnings history, they want you to pay FICA taxes on retirement contributions now. Don't feel bad about having to become a "tax expert" - even seasoned employees get tripped up by this stuff regularly. The fact that you're asking questions and wanting to verify your withholdings puts you way ahead of most people who just assume everything is correct. That attention to detail will serve you well throughout your career! Good luck with the taxr.ai analysis - it's really helpful to see everything broken down in plain English rather than trying to decipher cryptic paystub codes.

Welcome to the payroll tax learning curve! Your situation with potentially overpaid FICA taxes on HSA contributions is actually more common than you'd think. I went through something similar when I first started contributing to an HSA - it took me months to realize my employer was incorrectly including those contributions in my FICA wages. The Form 843 process is pretty straightforward once you have documentation showing the error. The key is getting clear records from your employer showing what they withheld versus what they should have withheld. That's where tools like taxr.ai can be really valuable - having that independent analysis gives you concrete evidence to present both to your payroll department and potentially to the IRS. One thing I learned the hard way is to address these issues sooner rather than later. The longer you wait, the more complex it becomes to unwind, especially if it spans multiple tax years. Since you've only been dealing with this for a few months, you're in a good position to get it resolved quickly. This thread really has become a masterclass in FICA taxes! It's incredible how one simple payroll question can reveal so many layers of tax complexity that most people never think about.

This is exactly the kind of real-world experience I needed to hear! Your point about creating a comparison chart is brilliant - I'm definitely going to set that up to track my own situation. The tip about looking for differences between "Social Security wages," "Medicare wages," and "Federal wages" on the paystub is so practical and actionable. It's reassuring to know that both taxr.ai and Claimyr actually delivered on their promises when you needed them. I've been hesitant to trust online services with my financial documents, but hearing multiple success stories from community members is giving me confidence to try them out. Your experience with payroll departments dragging their feet really resonates - I suspect I'm going to face similar resistance when I bring this up with HR. Having that independent third-party analysis seems crucial for getting them to take the issue seriously rather than just brushing it off as employee confusion. Thanks for sharing the specific details about what to look for on paystubs. That kind of practical guidance is exactly what newcomers like me need to navigate these complex payroll tax issues!

Welcome to the payroll tax maze! Your experience is so relatable - I remember that same sinking feeling when my first "real job" paycheck was way lower than expected. It's honestly ridiculous that nobody explains these basics when you're starting out. The 401(k) vs FICA distinction really is the biggest gotcha for new employees. I made the same mistake thinking all pre-tax deductions worked identically. Now I tell everyone: income tax deductions and payroll tax deductions are completely different beasts with their own rules. One thing that helped me beyond just understanding the calculations was setting up a simple monthly budget review where I actually reconcile my expected vs actual take-home pay. It sounds nerdy, but catching payroll errors early (like incorrect HSA withholding) can save hundreds of dollars over the year. The tools mentioned here really are game-changers. I was skeptical about uploading financial docs online too, but taxr.ai's security approach convinced me to try it, and I caught an error that my company's payroll department had missed for months. Sometimes you need that independent verification to feel confident advocating for yourself with HR. You're already ahead of most people by asking these questions and seeking to understand rather than just accepting whatever shows up on your paystub!

Welcome to the working world and congratulations on asking the right questions! Your experience mirrors exactly what I went through when I started my first job - that moment when you realize your actual paycheck doesn't match your mental math is such a wake-up call. The 401(k) vs FICA tax treatment really is the most counterintuitive part of payroll. I spent weeks thinking there was an error before I learned that Social Security and Medicare taxes don't care about your retirement contributions. It's one of those quirky tax code things that makes perfect sense once explained but feels completely backwards initially. What impressed me most about this discussion is how it demonstrates the power of community knowledge sharing. None of us learned this stuff in school, but by pooling our real-world experiences and mistakes, we've created a resource that's genuinely more helpful than most official government explanations. The tools everyone mentioned are definitely worth trying - I've used similar services and they really do take the guesswork out of whether your payroll is correct. Plus having that documentation gives you confidence when talking to HR if you do find issues. You're absolutely right that this should be taught in school! Until that changes, communities like this are invaluable for helping people navigate these financial realities. Best of luck with your new job and don't hesitate to ask more questions as they come up!