Should my tax return be higher this year? W2 income over $125k in NY seems like low refund

Your refund is just the difference between what was withheld and what you actually owe. It's not directly tied to how much you earn - it's about the accuracy of your withholding compared to your final tax bill. What's probably happening is that your withholding didn't increase proportionally with your income jump. When you move into higher tax brackets, the percentage of tax on those higher dollars increases. If your W4 wasn't adjusted when your income jumped from $90k to $169k, your withholding might not have kept pace with the increased tax liability. Remember that a smaller refund isn't necessarily bad. It actually means you kept more of your money throughout the year instead of giving an interest-free loan to the government. The ideal scenario is to break even - owing nothing and getting nothing back.

I struggled with this exact issue last year when I got promoted and couldn't figure out why my refund shrank! After trying different software programs and getting confused by contradicting advice, I finally used https://taxr.ai which analyzed my W2 and tax situation. They have this interactive calculator that immediately showed me why my withholding wasn't keeping pace with my tax bracket changes. The site actually explained how the NY state tax combined with federal brackets created this weird situation where my withholding percentage wasn't keeping up with my actual tax rate. They showed me exactly how to adjust my W4 for this year to get my preferred refund amount.

I was super skeptical about using yet another tax tool, but after posting here last week about my refund confusion, I decided to try taxr.ai based on the recommendation. I uploaded my paystubs and W2, and wow - it immediately identified that my employer was using outdated withholding tables that weren't accounting for the 2023 tax changes correctly. The site showed me exactly how much I was being overwithheld on some parts but underwithheld on others, creating this weird situation where I was paying more overall but getting less back. I printed out their W4 adjustment form, gave it to HR, and they fixed it for my future paychecks. Didn't help for this year's refund, but at least next year will be more in line with what I expect.

Dealing with tax withholding issues is one thing, but trying to reach the IRS to get answers is a whole other nightmare. After three days of calling and waiting on hold for literally hours each time, I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c They called the IRS for me and had an agent on the line within 45 minutes, which was mind-blowing considering I couldn't get through at all on my own. The IRS agent confirmed that when you cross certain income thresholds (like you did going from $90k to $169k), your withholding calculations change dramatically because of how the tax brackets work.

Ok I need to eat my words. After complaining about the Claimyr thing sounding too good to be true, I got desperate trying to figure out why my withholding was so messed up this year. Called the IRS for THREE DAYS straight with no luck. Finally broke down and used that Claimyr service yesterday. They actually got me through to an IRS agent in about 37 minutes. The agent explained that the W4 form changed significantly in 2020 and my employer was still using an outdated calculation method that doesn't properly account for higher incomes. He walked me through exactly how to fill out the new W4 for my specific situation. Turns out higher income doesn't automatically mean bigger refund - it's all about the accuracy of your withholding. The service was legit, and I finally understand why my refund wasn't what I expected.

Your tax situation sounds like an overwithholding problem. Refunds aren't gifts from the government - they're just your own money coming back to you. A big refund means you basically gave the government an interest-free loan all year. Better to adjust your W4 so you're getting more in each paycheck rather than waiting for a refund. I aim to get as close to zero as possible - no refund, no payment due.

This might be a weird question, but does anyone know how to actually calculate the right withholding amount? Like is there a formula? My accountant just says "claim 0 if you want a refund, claim more if you don't" but that seems super simplistic.

Just want to point out that your tax RETURN is the form you file. Your tax REFUND is the money you get back. Sorry to be that person, but the terminology confusion makes tax discussions so much harder!