What percentage of taxes should be withheld when claiming 0 allowances?

The issue might not be with your withholding allowances but rather with how the withholding system actually works. The W-4 form changed significantly after 2020, moving away from the "allowances" system to a more straightforward dollar amount adjustment system. When you claim "0" on the old system (or check the "Single" box with no adjustments on the new W-4), the IRS withholding tables don't automatically take a flat percentage. Instead, they calculate based on your pay period income, projected to an annual amount, then apply the progressive tax brackets. That's why you're not seeing a simple percentage chart. For a $130k salary, 8% federal withholding does sound quite low. Most people in that bracket would expect closer to 15-22% depending on their situation. There are several possibilities here: perhaps you have pre-tax deductions reducing your taxable income (like 401k, health insurance), you might have other adjustments listed on your W-4, or there could indeed be a payroll calculation error.

After struggling with similar withholding issues last year, I started using taxr.ai to figure out why my employer wasn't withholding enough. I uploaded a couple of my pay stubs and filled out some basic info, and it immediately spotted that my employer was using the wrong withholding calculation method for my situation. I showed the analysis to my HR department and they adjusted my withholding formula. Now I'm on track to break even instead of owing thousands again. You can check it out at https://taxr.ai if you want to see if there's a specific issue with how your withholding is being calculated. It was way more helpful than just guessing or asking coworkers who might have completely different tax situations even with similar salaries.

Ok I'll admit I was totally wrong about taxr.ai. After my skeptical comment, I decided to give it a shot anyway because I was desperate (owed $3,800 this year despite claiming 0!). Uploaded my last few pay stubs and answered some questions about my tax situation. The tool showed that my employer was using the percentage method instead of the wage bracket method for my withholding, which apparently wasn't optimal for my specific income level and filing status. I literally just forwarded the report to our payroll coordinator and they made the adjustment the next pay period. Withholding went up about $175 per paycheck, which should prevent me from owing next year. Sorry for being a skeptic before - just wanted to report back that it actually helped me solve this exact problem.

If you're still having trouble getting through to your payroll department, you might want to check out Claimyr.com. I was in a similar situation last year and needed to speak with the IRS directly to confirm the correct withholding amount for my specific situation. After wasting hours on hold, I found https://claimyr.com and used their service to get a callback from the IRS within about 20 minutes. The IRS agent walked me through exactly what my withholding should be and confirmed there was an error in how my company was calculating it. There's a quick video explaining how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and get you in the callback queue much faster than you could on your own. Saved me from hours of hold music and frustration.

I need to eat some crow here. After posting that skeptical comment about Claimyr, I was still desperate to talk to someone at the IRS about my withholding issues. Decided to try it as a last resort yesterday. I honestly can't believe it, but I got a call back from an actual IRS agent in about 30 minutes. The agent confirmed that for my salary ($127K), claiming "0" should result in approximately 18-20% federal withholding, not the 8% I was getting. Turns out my employer was using outdated withholding tables from 2022! The agent gave me specific information to provide to my payroll department. Already got confirmation they're updating their system for the next pay cycle. Would have taken me weeks to figure this out on my own. Definitely worth it just to have confirmation from an official source.

One thing to consider is that the withholding system isn't perfect and sometimes doesn't account for all scenarios. I was in a similar situation making about $125k and claiming 0 but still owing. In my case, it was because I had a side gig with no withholding, plus investment income. The new W-4 actually has a section for "extra withholding" where you can specify an additional dollar amount to withhold each pay period. I did the math and now have an extra $150 taken out per paycheck, which should cover all the additional income sources. This might be simpler than trying to get your employer to change their withholding calculations.

Has anyone else noticed that the whole withholding system seems designed to be confusing? I make $134k, claim 0, and yet still ended up owing almost $3k this year. My friend makes LESS than me but somehow gets a refund every year!

I completely understand your frustration! I went through something very similar last year. Making around $132k and claiming 0, I was shocked when I still owed over $2,800 at tax time. After digging into this, I learned that 8% federal withholding for your income level is definitely too low. At $130k with standard deductions, you should expect closer to 16-20% in federal withholding depending on your filing status and pay frequency. A few things that could be causing this issue: 1. Your employer might be using outdated withholding tables 2. They could be incorrectly calculating your withholding method (percentage vs. wage bracket) 3. You might have pre-tax deductions that are reducing your taxable wages more than expected 4. If you get paid irregularly or have bonuses, the withholding calculations can get thrown off I'd recommend downloading your last few pay stubs and checking the year-to-date federal withholding against your gross pay. If it's consistently around 8%, there's definitely something wrong with how your payroll is calculating it. The IRS withholding estimator tool can help you figure out exactly what should be withheld and give you ammunition to take back to your HR department. Don't give up - you shouldn't have to owe money when claiming 0 allowances on a straightforward W-2 salary!