Why are taxes still being withheld after filing Exempt on my W-4 at new job?

When you file exempt on your W-4, you're only exempting yourself from federal income tax withholding. Your employer is still required to withhold other taxes regardless of your W-4 status. The taxes you're still seeing on your paycheck are most likely: - Social Security tax (6.2% of your wages) - Medicare tax (1.45% of your wages) - State income tax (if your state has income tax) - Local taxes (depending on your location) None of these taxes are affected by claiming exempt on your W-4. The exempt status only applies to federal income tax. Also, keep in mind that claiming exempt is only valid if you had no tax liability last year AND expect to have no tax liability this year. If you don't meet these requirements, you could end up owing taxes (and possibly penalties) when you file your tax return.

After going through a similar situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that really helped me understand my paycheck deductions. I was super confused about why I was still seeing taxes taken out after claiming exempt, and someone on here recommended it to me. You just upload your paystub and it breaks down all the different deductions in plain English - it showed me exactly which taxes were FICA vs state vs local, and explained which ones are mandatory regardless of W-4 status. Made everything crystal clear about why certain taxes were still showing up even with my exempt status.

Just wanted to update after trying taxr.ai - it was actually super helpful! I uploaded my confusing ADP paystub and it immediately highlighted all the different tax categories. Turns out I was still having state taxes withheld (which made sense since I never filed a state exemption form), plus all the FICA stuff that's mandatory no matter what. The breakdown showed me exactly which line items on my paystub corresponded to which taxes. Way clearer than when I asked our HR person who just told me "various required taxes" without explaining anything specific.

If you're still confused after trying to figure this out yourself, I'd recommend using Claimyr (https://claimyr.com) to get straight to an IRS agent. I spent WEEKS trying to get through to someone at the IRS last tax season with questions about my withholding and it was impossible. Claimyr got me connected to a real IRS agent in about 20 minutes instead of me spending hours on hold. They have a demo of how it works here: https://youtu.be/_kiP6q8DX5c. The agent I spoke with explained exactly which taxes are mandatory regardless of exemption status and what my obligations would be at tax time after claiming exempt for part of the year.

OK I need to eat my words. After seeing a few people mention Claimyr here, I decided to try it myself because I had questions about my own withholding situation. I was 100% convinced it was a scam, but I was desperate after trying to call the IRS for three days straight. Well, color me surprised - it actually worked! I got connected to an IRS agent in about 45 minutes (while I just went about my day until I got the call back). The agent confirmed exactly what others have said here - exempt only applies to federal income tax withholding, not FICA or state taxes. But she also gave me personalized advice about my tax situation that was super helpful. I'm still a bit shocked this service actually delivers.

One thing nobody's mentioned yet - be really careful about filing exempt if you don't actually qualify. You need to have had NO tax liability last year AND expect none this year. If you end up owing taxes at the end of the year and you claimed exempt, you could get hit with underpayment penalties too. The IRS doesn't mess around with this stuff.

Has anyone ever had the payroll department make a mistake with the W-4? When I started my current job I filed as married with 2 allowances but they somehow put me as exempt for the first 3 paychecks without me requesting it. It was a headache to fix.

This is a great reminder for everyone! I learned this the hard way when I first started working. What really helped me understand my paystub was looking at each deduction line by line and researching what each acronym meant. For example, "OASDI" is Old-Age, Survivors, and Disability Insurance (Social Security tax), and "Medicare" is obvious but some people don't realize it's separate from Social Security. Also, if you're planning to claim exempt, make sure you actually qualify! The IRS is pretty strict about this - you need to have owed zero federal income tax last year AND expect to owe zero this year. If you're unsure, it's better to have a small amount withheld than to face penalties and interest later. You can always adjust your withholding throughout the year if needed.