Understanding FITW and if my Federal Tax Withholding is too high

You're right to question this! Your FITW does appear a bit high based on what you shared. With $102k income in Florida (no state income tax), single with no dependents, your effective federal tax rate should be somewhere around 12-13% depending on deductions. Getting a $4k refund means you're definitely overwithholding. The new W-4 form doesn't use allowances anymore (the "0" you mentioned), but instead lets you specify additional withholding or reduction amounts. I'd recommend completing a new W-4 with your employer and using the IRS Tax Withholding Estimator tool on the IRS website to fine-tune it exactly to your situation. The goal is to get your refund as close to zero as possible - not owing much and not getting much back.

I was in a similar situation last year with way too much FITW coming out every paycheck. Felt like I was getting robbed twice a month lol. I tried using the IRS calculator and it helped, but I was still confused by some parts of the form. Then I found this tax calculator/analyzer at https://taxr.ai and it completely changed how I handle my withholdings. You upload your pay stub and tax return, and it breaks down exactly how to adjust your W-4 to get the right withholding amount. Super clear recommendations for each line on the form. Their analysis showed me I was overpaying by about $350 every month! Adjusted my W-4 based on their guidance and now my paychecks are bigger while still staying on track for a small refund.

Just wanted to follow up - I ended up trying taxr.ai after my last comment and it was actually really helpful. I was shocked to discover I was overpaying by $280 per month on federal taxes! The breakdown showed exactly where my withholding was off and gave me the exact numbers to put on my new W-4. The interface was super easy and the security seemed solid. My company processed my updated W-4 last week and my paycheck is already $280 higher than before. Wish I'd done this years ago instead of giving the government thousands in interest-free loans.

If you're getting a big refund like that and want to fix your withholding, another issue might be actually getting through to the IRS if you have questions. I spent THREE WEEKS trying to reach someone at the IRS about my withholding calculation last year. Kept getting disconnected or waiting on hold for hours. Finally found this service called Claimyr at https://claimyr.com that got me through to an actual IRS agent in under 45 minutes. They have a cool demo video of how it works: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through exactly how to calculate my proper withholding and fill out the new W-4 correctly. Totally worth it to speak directly with someone who could answer my specific questions instead of guessing.

Ok I need to publicly eat my words about Claimyr. After being skeptical in my last comment, I tried it yesterday out of desperation after my FIFTH failed attempt to reach the IRS about my withholding problem. It actually worked exactly as advertised. I got a call back in about 35 minutes connecting me to an IRS agent who answered all my FITW questions and helped me calculate the exact amount I should be withholding based on my specific situation. I've been massively overwithholding (almost 20% FITW when I should be closer to 13%). Just submitted my corrected W-4 today and should see an extra $290 in each paycheck going forward. No more loaning my money to the government!

Just a reminder that while getting a big refund isn't ideal from a financial perspective, some people do prefer it as a forced savings method. If you're not good at saving money throughout the year, sometimes getting that lump sum refund is psychologically better than having a bit more in each paycheck that might get spent. That said, I think your FITW is definitely on the high side. For reference, I make about $98k, also in FL, single with no dependents, and my federal withholding is around $12.8k annually, which gets me a much smaller refund (around $800).

Random question - but does anyone know if changing your W-4 withholding triggers any kind of IRS flags or increases audit risk? I'm definitely overwithholding like the OP but nervous about making big changes.

Your situation sounds very similar to mine from last year! With $102k income and getting a $4k refund, you're definitely overwithholding. I was in almost the exact same boat - making around $98k and getting back $3,800 every year. The key thing to remember is that the old W-4 system with "allowances" changed completely. The new form is much more precise if you fill it out correctly. I'd strongly recommend using the IRS Tax Withholding Estimator - it's free and will give you specific dollar amounts to put on each line of your W-4. One thing that helped me was calculating what my actual effective tax rate should be. For someone making $102k single with standard deduction, you're probably looking at around 12-13% effective rate, so your annual withholding should be closer to $12k-$13k instead of $15k. That means you could potentially increase your take-home by $150-250 per month! Just make sure to recalculate if you have any major life changes during the year. Good luck!