Understanding FITW (Federal Income Tax Withholding) - Does Mine Seem Too High?
Hey guys, trying to understand if my Federal Income Tax Withholding (FITW) is too high or normal. Looking at my 2024 paystubs, I've made roughly $82.6k so far and my FITW is already at $12.9k. I live in Florida so no state income tax, but this still feels like a lot each month. Last year I got about $4k back as a refund, but honestly I'd rather have that money in my pocket throughout the year instead of giving the government an interest-free loan. I'm filing as single with 0 exemptions and don't have any dependents. Any insights on whether this withholding amount seems off or if there's a better way to calculate what I should actually be paying? Thanks!
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Emma Davis
Your withholding does seem a bit high based on what you've shared. Getting a $4k refund means you're definitely overwithholding. For single filers with no dependents making around $80k, your annual federal tax liability should be closer to $9-10k rather than nearly $13k. The simplest solution is to update your W-4 form with your employer. The IRS redesigned the W-4 in 2020, so there's no more "claiming exemptions" - instead you can either claim an additional withholding amount or a reduction amount. In your case, you could add an "extra withholding credit" in Step 3 or indicate "additional income" in Step 4 with a negative number. The IRS also has a Tax Withholding Estimator tool on their website that can help you calculate the exact amount to adjust. Just input your expected annual income, current withholding to date, and it'll tell you how to adjust your W-4 to get closer to zero refund/balance due.
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CosmicCaptain
•Thanks for this explanation. Question - wouldn't putting a negative number in the "additional income" box be technically incorrect since the form doesn't say you can use negative numbers? Also, is there any downside to adjusting withholding like this? I don't want to accidentally end up owing a bunch at tax time.
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Emma Davis
•Using a negative number in Step 4(a) isn't the standard approach, you're right. The proper method would be using Step 4(c) for additional withholding, but with a negative amount (which effectively reduces your withholding). The IRS withholding calculator will actually tell you exactly which boxes to fill and with what amounts. There's no downside to adjusting your withholding as long as you're accurate with your estimates. Just make sure you won't have any major changes to your income or filing situation. The general rule is that you need to have withheld either 90% of your current year tax or 100% of your prior year tax (110% if your income is over $150,000) to avoid underpayment penalties. As long as you stay within those safe harbors, you're fine to reduce your withholding to minimize that big refund.
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Malik Johnson
This is exactly why I signed up for taxr.ai when I was having similar issues with my withholding! I was getting massive refunds every year (around $5k) which was just money sitting with the IRS instead of in my accounts. I uploaded my paystubs and W-2 to https://taxr.ai and their system analyzed my withholding patterns and showed me I was massively overpaying throughout the year. They gave me specific instructions for filling out a new W-4 that would get me closer to breaking even. The coolest part was they projected exactly how each paycheck would change with the new withholding amounts. Been using their withholding calculator for about 8 months now and my latest projection shows I'll only get about $200 back this year instead of thousands!
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Isabella Ferreira
•That sounds helpful but does it only work for W-2 employees? I'm both W-2 and have some 1099 side work, so my withholding situation is more complicated. Can it handle both income types when calculating proper withholding?
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Ravi Sharma
•Is this service free? Sounds like it could be useful but not if it costs more than I'd save by fixing my withholding lol. I've tried the IRS calculator before and found it super confusing.
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Malik Johnson
•It handles mixed income really well! I actually have a small side business too, and the system lets you input both W-2 withholding and estimated tax payments for self-employment income. It even helps calculate how much you should be setting aside from your 1099 work each quarter. As for cost, they have a free basic version that covers simple withholding calculations. They do have paid tiers for more complex situations or if you want ongoing monitoring throughout the year - but honestly even if you pay for a month to get your withholding fixed and then cancel, you'd still come out way ahead compared to giving the government thousands in an interest-free loan. So much better than the IRS calculator which feels like it was designed in 1997!
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Isabella Ferreira
Just wanted to follow up about that taxr.ai site mentioned above. I was skeptical but decided to try the free version since my withholding has always been a mess with my mixed income sources. It was surprisingly easy to use! Uploaded my last W-2 and a couple paystubs plus entered my expected 1099 income for the year. The analysis showed I was overpaying by about $3,200 annually just on my W-2 job, while simultaneously underpaying on my freelance work (setting myself up for penalties). The site generated a custom W-4 form with exact numbers for each box and told me exactly how much to pay for remaining quarterly estimated payments. Just got my first paycheck with the new withholding and it's exactly what they projected - about $125 more per paycheck. Already set up automatic transfers for that amount into my savings for my next estimated payment. Finally feel like I have this figured out!
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Freya Thomsen
If you're having trouble getting your withholding right AND you've had issues reaching the IRS for questions (like I did), Claimyr has been amazing for me. I spent weeks trying to get through to an IRS agent about my withholding issues last year and kept getting disconnected or waiting for hours. Used https://claimyr.com and got connected to an actual IRS agent in about 20 minutes instead of the usual 2+ hour wait. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with walked me through exactly how to adjust my W-4 for my specific situation (I had multiple jobs plus investment income that was complicating things). When I explained I'd been getting $3-4k refunds consistently, she helped me calculate the exact adjustment needed.
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Omar Zaki
•Wait, so this service somehow gets you through the IRS phone queue faster? How is that even possible? The IRS phone system is notoriously awful.
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AstroAce
•This sounds like BS honestly. No way some third party service can magically get you through to the IRS faster than everyone else. They probably just keep you on hold themselves and then transfer you when they finally get through.
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Freya Thomsen
•It's not magic - they use an automated system that continually calls the IRS using the optimal calling patterns and holds your place in line. When they connect, they immediately conference you in. It's basically like having someone else do the calling and waiting for you. It works because they understand the IRS call routing system and know the best times/patterns to call. And no, they don't just keep you on hold - you actually get a text message when they're about to connect you, so you don't have to wait around. I was skeptical at first too, but when I got through to an actual IRS agent after trying unsuccessfully for days on my own, I was sold.
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AstroAce
Well I have to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway because I was desperate to talk to someone about a withholding issue on my pension payments that was causing way too much to be withheld. The service actually worked exactly as advertised. Got a text saying they were calling the IRS, then another text about 15 mins later saying they were connecting me. Spoke with an IRS agent who explained that pension withholding uses different tables than regular income and helped me submit the correct form to fix it. Already got my first pension payment with the corrected withholding - went from having about 22% withheld down to 12%, which is much more appropriate for my total income. Would have probably gotten another huge refund if I hadn't fixed this. Definitely worth it when you actually need to talk to someone at the IRS.
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Chloe Martin
Just want to add something nobody's mentioned yet - your withholding might seem high but have you considered your overall tax situation? Like, do you have any other income sources besides your regular job? Investment income, side hustles, etc. can change your total tax liability. Also, sometimes having slightly higher withholding can be strategic if you normally have things like capital gains or other income that isn't subject to withholding. It's a way to avoid underpayment penalties without having to make separate estimated tax payments.
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Javier Torres
•No other income sources - just my regular W-2 job. No investments that generate significant income, no side hustles. That's why the high withholding seems odd to me. I don't mind getting some money back at tax time, but $4k feels excessive when I could be using that money throughout the year.
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Chloe Martin
•In that case, you're definitely overwithholding. With just W-2 income, you should be able to get pretty close to breaking even. The suggestions above about adjusting your W-4 are solid. One more tip - after you submit a new W-4, check your next few paychecks to make sure the changes took effect correctly. Sometimes payroll departments make mistakes implementing withholding changes. Also, if you don't want to mess with the complicated calculations, a simple approach is to just use Line 4(c) of the W-4 to specify an exact dollar amount LESS to withhold per pay period. If you're getting $4k back and have 24 pay periods, you could just put -$167 on that line to reduce each paycheck's withholding by that amount. Just make sure your payroll system allows negative numbers there.
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Diego Rojas
Has anyone here used the IRS withholding calculator lately? Last time I tried it (maybe 2 years ago) it was basically unusable. Wondering if they've improved it since then?
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Anastasia Sokolov
•I used it last month and it's slightly better than before but still pretty confusing. You need to have your most recent paystub AND last year's tax return handy to use it effectively. The biggest issue I had was that it doesn't handle irregular income well. I got a bonus early in the year and it threw off all the calculations. Ended up just guessing at how to adjust my W-4.
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