Help! I started a new job, filled out my W4, and no federal taxes withheld?

[midweststache]

Hi All! I'm hoping this very smart finance community can help where my organization and the Internet can't.

I started a new job in February - a great change for my personal and professional life. Obviously I filled out all my HR docs, including a new W4. I was shocked to see that there was no place to claim exemptions. Instead, the form has been overhauled "for simplicity."

It's anything but. (See form on IRS website here: https://www.irs.gov/pub/irs-pdf/fw4.pdf)

I filled out Step 1, indicated in Step 2 that my husband and I both have jobs (check box 2C), and then added my two children as dependents in Step 3 for a deduction of $4,000. (We make under $400K combined.)

Since I started this job, exactly $0 have been withheld for federal taxes from my paychecks. There's no way that's right (RIGHT?) but everything I'm getting back when I push this up the chain is ¯\_(ツ)_/¯. I think HR has been as helpful as they can, but they're not able to offer specific help i.e. suggestions for how to fill it out.

Am I taking crazy pills here? I consider myself a generally smart person, but this is keeping me up at night because apparently I can't fill out the most basic of adult paperwork.

[SwordGuy]

Hi All! I'm hoping this very smart finance community can help where my organization and the Internet can't.

I started a new job in February - a great change for my personal and professional life. Obviously I filled out all my HR docs, including a new W4. I was shocked to see that there was no place to claim exemptions. Instead, the form has been overhauled "for simplicity."

It's anything but. (See form on IRS website here: https://www.irs.gov/pub/irs-pdf/fw4.pdf)

I filled out Step 1, indicated in Step 2 that my husband and I both have jobs (check box 2C), and then added my two children as dependents in Step 3 for a deduction of $4,000. (We make under $400K combined.)

Since I started this job, exactly $0 have been withheld for federal taxes from my paychecks. There's no way that's right (RIGHT?) but everything I'm getting back when I push this up the chain is ¯\_(ツ)_/¯. I think HR has been as helpful as they can, but they're not able to offer help.

Am I taking crazy pills here? I consider myself a generally smart person, but this is keeping me up at night because apparently I can't fill out the most basic of adult paperwork.

First of all, they pretty much HAVE to take out FICA, etc.   Doesn't matter how much or little you make.   If they aren't doing that they are (a) doing something wrong and (b) breaking the law.    Might be a few professions (like preacher) where that doesn't apply, but for 99.999% of wage earners, it's mandatory.

What are you being paid at this job?  If it's going to be a smallish amount over the course of a year you might not owe any income tax on it.

Now, if you AND your husband BOTH work, you will be under-withheld if you file jointly if you BOTH claim yourself, your spouse and your two kids.   That's because your tax rate will be determined by total household income but your withholding will be determined by just your income.   

[midweststache]

Hi All! I'm hoping this very smart finance community can help where my organization and the Internet can't.

I started a new job in February - a great change for my personal and professional life. Obviously I filled out all my HR docs, including a new W4. I was shocked to see that there was no place to claim exemptions. Instead, the form has been overhauled "for simplicity."

It's anything but. (See form on IRS website here: https://www.irs.gov/pub/irs-pdf/fw4.pdf)

I filled out Step 1, indicated in Step 2 that my husband and I both have jobs (check box 2C), and then added my two children as dependents in Step 3 for a deduction of $4,000. (We make under $400K combined.)

Since I started this job, exactly $0 have been withheld for federal taxes from my paychecks. There's no way that's right (RIGHT?) but everything I'm getting back when I push this up the chain is ¯\_(ツ)_/¯. I think HR has been as helpful as they can, but they're not able to offer help.

Am I taking crazy pills here? I consider myself a generally smart person, but this is keeping me up at night because apparently I can't fill out the most basic of adult paperwork.

First of all, they pretty much HAVE to take out FICA, etc.   Doesn't matter how much or little you make.   If they aren't doing that they are (a) doing something wrong and (b) breaking the law.    Might be a few professions (like preacher) where that doesn't apply, but for 99.999% of wage earners, it's mandatory.

What are you being paid at this job?  If it's going to be a smallish amount over the course of a year you might not owe any income tax on it.

Now, if you AND your husband BOTH work, you will be under-withheld if you file jointly if you BOTH claim yourself, your spouse and your two kids.   That's because your tax rate will be determined by total household income but your withholding will be determined by just your income.   

@SwordGuy - Thanks for the feedback. Medicare/Medicaid & SS are taken out, as are my state taxes. Just no federal income tax.

I make just under 50K; husband makes just over twice that. At my old job, which had a similar pay rate (I left for infinitely better benefits, but a lateral pay rate), I consistently had $50/check withheld for income tax.

That's a good point about double deductions though - my husband does claim both our kids on his W4 so I'll pull them off mine. That will keep us from double-deducting; if that still fails to result in federal income withholding... I'll probably just throw my hands up and figure it out come this time 2021.

[SwordGuy]

Here's the tax table booklet:

https://www.irs.gov/pub/irs-pdf/p15t.pdf


If you are subtracting money from your paycheck for 401K or other pre-tax deductions, remember to subtract that amount out before you look up your wages in the tables.   They have weekly, biweekly, monthly, etc.

[MDM]

That's a good point about double deductions though - my husband does claim both our kids on his W4 so I'll pull them off mine. That will keep us from double-deducting; if that still fails to result in federal income withholding... I'll probably just throw my hands up and figure it out come this time 2021.

Note the following on the W-4 form: "Complete Steps 3–4(b) on Form W-4 for only ONE of these jobs. Leave those steps blank for the other jobs. (Your withholding will be most accurate if you complete Steps 3–4(b) on the Form W-4 for the highest paying job.)"

You could estimate appropriate withholding using tools such as
- case study spreadsheet
- Tax Withholding Estimator | Internal Revenue Service
- etc.

[Proud Foot]

That's a good point about double deductions though - my husband does claim both our kids on his W4 so I'll pull them off mine. That will keep us from double-deducting; if that still fails to result in federal income withholding... I'll probably just throw my hands up and figure it out come this time 2021.

If you make those changes and it still results in 0 federal income withholding you can always enter an amount on line 4c that will be withheld each pay period.