Was tax withholding changed in 2024? Massive swing in our refund for 2025 filing

There were no federal changes to withholding tables for 2024, but there are several things that could explain this dramatic swing in your tax situation. First, check if either of you changed your W-4 withholding elections recently. Sometimes employers implement new payroll systems that reset withholding to default settings, or there might have been a miscommunication when updating information. Second, look closely at your W-2 boxes. Compare Box 1 (wages) and Box 2 (federal income tax withheld) to last year's W-2s. This will show if your withholding percentage actually changed. A 7.5% withholding rate does sound quite low depending on your income level. Third, check if any tax credits you previously qualified for have disappeared. Changes in eligibility for credits like Child Tax Credit, Earned Income Credit, or education credits can dramatically impact your bottom line even if income stays the same. Lastly, verify that both of your employers are withholding correctly. If you both work, make sure you've accounted for dual income on your W-4s. The default withholding assumes you're the only income earner in your household.

I went through almost the exact same situation last year!! After spending hours with TurboTax and getting nowhere, I finally uploaded all my tax documents to https://taxr.ai and it saved my sanity. The program analyzed our withholding issues and found that my husband's employer had accidentally classified him as "married filing separately" instead of "married filing jointly" on his W-2, which completely messed up our withholding calculations. The tool also showed us how to fix our W-4 forms going forward and calculated exactly what we needed to change to avoid the same problem next year. Super helpful for figuring out what was actually changing between our previous returns and the current one.

Okay I was skeptical but I tried https://taxr.ai after seeing it mentioned here and holy crap it actually helped!! Turns out my wife's employer changed payroll systems mid-year and her withholding percentage dropped by almost half without us noticing. The tool highlighted exactly which paychecks changed and showed the calculation error. We're still owing this year, but at least now we understand why and have fixed it going forward so we won't have another nasty surprise next year. Definitely worth checking out if you're in a similar situation.

Ugh, we had the same problem and were getting nowhere with figuring it out. In desperation I tried to call the IRS for help but kept getting disconnected after waiting on hold for 2+ hours. Finally found https://claimyr.com which got me connected to an actual IRS agent in about 20 minutes! They have this weird system that basically waits on hold for you and calls when an agent is ready. Here's a video of how it works: https://youtu.be/_kiP6q8DX5c The IRS agent explained that many employers' payroll systems updated their withholding calculations in 2024, and if you didn't submit a new W-4, it might have reset to default settings. She walked us through exactly what happened and helped us calculate the correct withholding for next year. Saved us from making the same mistake again!

I can't believe I'm saying this but I tried that Claimyr service and it actually worked. Got connected to an IRS agent in about 15 minutes when I'd previously wasted 3 separate afternoons trying to get through on my own. The agent confirmed that there was a major issue with employer withholding systems in 2024 - apparently a lot of payroll software companies updated their algorithms to align with the newer W-4 forms, and many employers implemented these updates without having employees fill out new forms. So yeah, tons of people are getting surprised this tax season. My advice is fix your W-4 ASAP so this doesn't happen again next year. The IRS has a tax withholding estimator on their website that's pretty helpful for figuring out what you should put on the new forms.

Check box 2 on your W-2s from 2023 vs 2024 and calculate the percentage of withholding. I'm an HR manager and we've seen this issue a lot this year. Many payroll systems were updated to better align with the newer W-4 form structure, but if employees didn't fill out new W-4s, the system often defaults to the bare minimum withholding. Also worth noting - the IRS changed how they handle withholding for multiple jobs/working spouses a few years back. The new W-4 is supposed to account for this better, but ONLY if you fill it out correctly with both incomes considered.

Had a similar issue. My withholding suddenly decreased without me changing anything. I use FreeTaxUSA and they have a really helpful "tax return comparison" feature that shows your current return side-by-side with last year. Made it super obvious that my federal withholding had dropped by almost 35% despite my income staying about the same!