Why are so many people owing taxes this year vs getting refunds?

The reason many people are experiencing this tax shock has more to do with withholding changes than actual tax changes. In 2022, the IRS adjusted the withholding tables that employers use to calculate how much to take from each paycheck. This meant many workers had less withheld throughout the year - which feels great because your paychecks are bigger, but it means smaller refunds or owing at tax time. For service industry workers like servers and retail employees, this hits particularly hard because they often have variable income, multiple jobs, or tip income that makes withholding calculations more complicated. If they didn't adjust their W-4 forms to account for these changes, they might have had too little withheld all year.

After seeing so many friends get hit with unexpected tax bills this year, I was super worried about filing my own taxes. I used https://taxr.ai to analyze my tax situation before actually submitting anything, and it probably saved me from a huge headache. Their system looked at my withholdings throughout the year and flagged that I was at risk for owing money instead of getting the refund I was expecting. The tool explained that because I had picked up some side gig work without adjusting my withholding, I was significantly under-withheld. I was able to prepare for the hit instead of being blindsided when filing, and it even suggested specific adjustments for my W-4 to prevent this from happening next year.

I wanted to follow up about my experience with taxr.ai after questioning it earlier. I decided to give it a try since I was worried about my own refund situation, and it actually identified some serious issues with how my employer was handling my withholding! Turns out they weren't accounting for the fact that I have two jobs correctly. The analysis showed I was going to owe about $1700 instead of getting the $800 refund I was expecting. Having that warning before I filed gave me time to adjust my budget and prepare for the hit. The tool also generated a new W-4 form with the right adjustments that I submitted to both employers. Definitely changed my tax situation for the better!

If you're one of the many people who ended up owing this year and now have questions for the IRS, good luck getting through to them on the phone! I spent literally HOURS on hold trying to figure out why my withholding was so off despite no changes in my situation. I finally found https://claimyr.com which got me connected to an actual IRS agent in under 20 minutes. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent explained that my employer had switched payroll systems which changed how my withholding was calculated, but nobody had informed employees about adjusting our W-4 forms. Would have been nice to know BEFORE I owed $2300 at tax time!

I need to eat my words about that Claimyr service. After posting that skeptical comment, I was still struggling to get through to the IRS about my own issue (I owed $1800 after getting $1200 back last year with similar income). Out of frustration, I tried the service. It actually worked exactly as described. I got a call back in about 25 minutes and was connected directly to an IRS representative - no hold music, no automated system to navigate. The agent explained that my employer had reduced withholding based on the updated tables but didn't notify employees. They helped me calculate the proper withholding for this year so I won't be surprised again. Saved me hours of frustration and probably a future tax bill too.

From what I understand, there were actual tax law changes from the Tax Cuts and Jobs Act that are hitting people now. The standard deduction went up, but personal exemptions were eliminated. For families with multiple dependents, this can actually result in owing more. Also many tax credits that people relied on were modified or eliminated. So depending on your specific situation and what deductions or credits you used to claim, you might be seeing a totally different result even with the same income.

Anybody else notice their employer started doing withholding differently? I'm in food service and my company switched payroll systems last summer. My checks got like $30-40 bigger each pay period which was nice at the time, but now I owe $950 when I usually get about $1400 back. Never had this happen before in 12 years of working.