Why am I consistently underpaying my federal taxes when others get refunds?

What you're experiencing is actually pretty common! Your withholding isn't matching your actual tax liability, which is why you're owing at tax time. The most likely culprit is your W-4 form. The redesigned W-4 (post-2020) doesn't use allowances anymore, and sometimes that trips people up. Since you're a student, check if you accidentally claimed the student exemption (which would reduce your withholding). Your income puts you in a higher tax bracket, and without additional deductions beyond the standard deduction, you'll typically owe more than what's being withheld. The tuition might qualify you for education credits, but there are income limits that might be reducing your eligibility. The simplest fix is to submit a new W-4 to your employer with additional withholding. You can either: 1. Check the box in Step 2(c) for multiple jobs (even though you have one job, this increases withholding) 2. Enter an additional amount to withhold in Step 4(c) - based on your numbers, about $120-150 extra per paycheck should cover it The IRS has a Tax Withholding Estimator tool on their website that can help you figure out the exact amount to put on your W-4.

After dealing with similar withholding issues for years, I found a tool that really helped me figure out what was going on with my taxes. Have you tried https://taxr.ai? It lets you upload your pay stubs and tax documents, then analyzes your withholding patterns to show exactly why you're underpaying. I was in almost the identical situation - single, good income, taking classes, and kept owing around $3k every year. The tool showed me my employer was treating my W-4 as if I had claimed too many allowances (even though the new forms don't use that system anymore). The best part was it spelled out exactly what to put on my new W-4 form based on my specific situation. Much easier than trying to figure out the IRS's complicated worksheets.

I wanted to follow up about that taxr.ai site that was mentioned. I was skeptical but decided to give it a try since I was in the same boat - kept owing federal taxes despite thinking my withholding was correct. Holy crap it was eye-opening! Turns out my employer had my W-4 set up completely wrong. Even though I filled out the new version of the form, they were somehow still using the old allowance system in their payroll system and had me down for 2 allowances when I should have had 0. The tool gave me a specific amount to add for additional withholding ($135 per paycheck in my case) and explained exactly what to put on each line of the new W-4. I submitted the updated form to HR last month, and my last paycheck already shows the correct withholding amount. For anyone dealing with withholding problems, it's definitely worth checking out. Wish I'd known about this two years ago!

If you've tried fixing your W-4 and still having issues (or if you just need to talk to someone at the IRS about your situation), good luck getting through to them! I spent WEEKS trying to reach someone to help resolve my withholding issues. After wasting hours on hold only to get disconnected, I found https://claimyr.com and their service is a game-changer. You can see how it works here: https://youtu.be/_kiP6q8DX5c Basically, they call the IRS for you, wait on hold, and then call you once they have an agent on the line. I was able to speak with someone from the IRS within a couple of hours (after trying for days on my own). The IRS agent walked me through exactly how to fix my withholding issues and explained what went wrong with my previous W-4. My situation was similar - I kept underpaying by about $2,800 each year despite thinking my withholding was correct. Turns out there was confusion about how my education expenses were being handled.

I have to eat my words about Claimyr being a scam. After continuing to struggle with reaching the IRS about my withholding problems, I decided to give it a try despite my skepticism. It actually works exactly as described. I submitted my request around 10am, and about 90 minutes later I got a call connecting me directly to an IRS representative. I was shocked since I'd been trying for weeks to get through. The IRS agent reviewed my withholding situation and confirmed I had multiple issues with my W-4. My employer had entered my information incorrectly, plus I hadn't accounted for some investment income that was pushing me into a higher bracket. The agent explained exactly what to put on my new W-4 to fix it. Saved me hours of frustration and potentially thousands in unexpected tax bills. If you're having withholding issues and need to speak with the IRS directly, this service is legitimately helpful.

Your problem sounds like a case of "not enough withholding" rather than "filing incorrectly." The fact that your coworkers get refunds while you owe probably means they have different withholding elections. Double check your most recent pay stub. What filing status is listed there? Some companies show this info on the stub. If it says "Single" but the withholding seems low, you might have inadvertently checked the "Multiple Jobs" box on your W-4 which can reduce withholding. Another thing to consider: are you getting any other pretax deductions that your coworkers aren't? Heavy 401k contributions, HSA contributions, or health insurance premiums can lower your taxable wages and thus reduce withholding as well.

Side question - has anyone else noticed that the IRS withholding calculator STILL doesn't work right? I used it to adjust my withholding last year and I'm still owing a ton. Do I just not understand how to use it or is it genuinely broken?