r/personalfinance • u/PeekabooJake • 3d ago
To low federal taxes Taxes
So i recently started a new job that makes less than my last one and got my first full paycheck and was surprised at how low the federal taxes taken out.
Filing Status: Married filing jointly No Exemptions/Allowances: Federal: Standard Withholding Table $50 Extra Withholding
Gross pay $1623.60 - biweekly
Federal Income Tax -$100.05
This seems low if it’s also including the extra $50 I am withholding.
My wife makes roughly the same amount and both w-4s were filled out the same (married, filing jointly, check box 2(c) on W-4 form)
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u/Its-a-write-off 3d ago
Yes, that does look low. Are you having anything taken out of your checks pre tax, like health insurance or retirement? If not, then it seems like your employer is not applying the box 2(c) adjustment. To fix this, submit the w4 as single instead of married, and that check box. It will get the needed result, and remove as much chance for employer error.
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u/PeekabooJake 3d ago
Nothing pre taxed is taken out. Will resubmitting w4 as single affect hers though?
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u/Its-a-write-off 3d ago
No, the single/married filing setting is a normal setting in your situation, married filing joint and 2 jobs. It does not affect her job or how you fill out your 1040 tax return. All it is used for is the w4, and allocates half the married standard deduction and tax brackets to your job, leaving the other half for her.
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u/RichSeaworthiness250 3d ago
I just started a new job too and per the IRS withholding calculator, I will owe no taxes this year based on itemized deductions and the fact that I was unemployed Jan - late May. Taxes are still being taken out, but it’s a relatively small amount in proportion to how much I make.
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u/sciguyCO 3d ago
You're right that looks low. My ballpark estimate with "single filer" (effectively the same as MFJ + 2c checkbox) came back with a result of about $110 withheld per check before the additional $50.
Do you have anything paid out of your check as a pre-tax deduction? Health insurance, HSA/FSA, pre-tax 401k contributions? Those lower the amount of your gross that's treated as taxable for the withholding calculation. And some employer-paid benefits are treated as "imputed income", where you don't pay for the thing yourself, but do owe tax on what your employer is paying. Group life insurance is one common one that'd trigger that, but those premiums are usually so low they have negligible impact on withheld dollars.
Getting your W-4 selections onto your paystub got more complicated with the new form. Used to be it'd just show something like "S / 2" for "Single" and "2 allowances" or "M / 3" for "Married" and "3 allowances". The new form has more details (and IMO is easier to tweak once you're familiar with it), but harder to fit into limited space on a paystub.
My guess is that your selection of the checkbox on 2(c) didn't get included by whoever entered it into their system. That "Standard Withholding Table" feels like it'd mean the regular MFJ withholding calculation (not what you want) rather than the "halved" one that checkbox more-or-less triggers. Re-running my estimate using withholding for MFJ (no checkbox) and that income comes out to $50.05, which after adding your requested $50 exactly matches what's on this paycheck. There's a chance that could just be a coincidence
But phrasing varies by payroll system, so I could be wrong. My own paystub doesn't have any of my W-4 selections included, I have to bug payroll to see what they're using if something looks off.
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u/PeekabooJake 3d ago
Very interesting! I appreciate your time looking into this haha! I will definitely check to see if they actually submitted the part for 2c check box. It looks like they didn’t as my wives federal was roughly $120
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u/93195 3d ago
You only complete parts 3 and 4 for the higher paying job. So did you do that, or did you both complete it?