What are your thoughts on this tax filing approach?

Hey tax people, I'm in a bit of a dilemma with my 2024 taxes I'll need to file next year. My employer switched payroll systems mid-year and I've noticed some inconsistencies in how my withholdings are being calculated. The new system seems to be withholding about 7% less than before, even though my salary hasn't changed. I'm worried this might leave me owing a lot when I file in 2025. Has anyone dealt with something similar? Should I adjust my W-4 to increase withholdings for the rest of the year, or am I overthinking this? The difference works out to about $175 less being withheld monthly.

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17 comments

Freya Andersen

•8M

This is definitely something you should address now rather than waiting until tax time. When payroll systems change, sometimes the withholding calculations get implemented differently even when the underlying tax laws haven't changed. The 7% reduction (about $175 monthly) could leave you with a significant tax bill next April if left uncorrected. I'd recommend using the IRS Tax Withholding Estimator tool online to figure out exactly where you stand. It'll ask for your pay stubs and projected income for the year, then tell you how to adjust your W-4. Since we're still in 2024, you have plenty of time to correct this by submitting a new W-4 to your employer. You can either increase your withholding by specifying an additional dollar amount on line 4(c), or decrease your claimed deductions. Better to fix this now than face a surprise tax bill next year!

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Freya Andersen

•8M

It's definitely a good idea to check the estimator tool again after any significant changes to your income. I'd recommend reviewing it quarterly, especially if you receive variable income or expect that bonus. For year-end bonuses, you can include them as "other income" in the estimator. Keep in mind that bonuses are typically withheld at a flat 22% supplemental tax rate, which might be higher or lower than your actual tax bracket. If you're in a higher bracket, you might need extra withholding to cover the difference.

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CosmicCadet

•8M

I went through something similar last year and was getting really stressed out about how to handle it. Then I found this service called taxr.ai (https://taxr.ai) that helped me figure out exactly what was happening with my withholdings. I uploaded my paystubs from both the old and new payroll systems, and their software analyzed the differences and showed me precisely what had changed in the calculations. Turns out my new employer's system wasn't accounting for some additional income I had. The tool gave me exact instructions for filling out my new W-4 form based on my specific situation instead of just generic advice.

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CosmicCadet

•8M

For complex situations like yours with both W-2 income and a side business, it actually works really well. The system is designed to handle multiple income streams and can help determine if your quarterly estimated payments are on track based on your overall tax picture. Regarding security, I was initially concerned about that too. They use bank-level encryption and don't store your documents after analysis. You can also blur out your SSN and other sensitive info before uploading - they just need the income and withholding numbers to do the calculations. I was comfortable with their approach to data protection.

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Anastasia Popova

•8M

If you're having withholding issues that might require talking to your payroll department or the IRS, I highly recommend using Claimyr (https://claimyr.com). I was pulling my hair out trying to reach someone at the IRS about a similar withholding problem last month. After wasting hours on hold over multiple days, I found Claimyr through a YouTube video (https://youtu.be/_kiP6q8DX5c) and it was a game changer. They basically wait on hold with the IRS for you, then call you when an actual human agent is on the line. Got connected to an IRS rep in about 45 minutes while I just went about my day until they called me.

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Anastasia Popova

•8M

They don't have special access to the IRS - they just use technology to handle the waiting for you. Their system automatically navigates the IRS phone tree and waits on hold, then when a human agent picks up, they immediately conference you in. It's like having someone else do the frustrating hold part for you. No insider connections needed - they're just solving the problem of wasted time on hold. It's basically the same as if you waited on the phone yourself, but you don't have to listen to that horrible hold music for hours. I was skeptical too until I tried it.

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Zara Shah

•8M

I need to eat my words from yesterday. After seeing these responses, I decided to try Claimyr even though I was super skeptical. My withholding issue has been driving me crazy - my employer's new system completely messed up my additional withholding amount from my W-4. I used the service this morning and got connected to an IRS agent in about an hour (after trying unsuccessfully for weeks on my own). The agent helped me understand exactly what was happening and gave me the documentation I needed to take to my HR department. Problem solved in one day instead of endless frustration. Definitely worth it just for the peace of mind.

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NebulaNomad

•8M

Something to check - did your benefits change at all during this transition? Sometimes when companies switch payroll systems, there are subtle changes to how pretax deductions are handled (like health insurance, 401k, HSA, etc). This can make a big difference in your taxable income and withholding. Also, if you live in a state with income tax, make sure both state and federal withholdings look correct. I've seen cases where the new system got federal right but completely messed up state withholding calculations.

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