One paycheck I earned only $77 and the govt withheld 9% of it.
Then I earned $2,000 and they withheld 26% of it.
Is everyone else experiencing this?
The less you earn, the less percentage-wise the govt withholds? The more you earn, the greater percentage they withhold?
At this rate, I fear that if I hypothetically would earn $8,000, they would withhold 100% of it. Do you see where this is going?
https://en.m.wikipedia.org/wiki/Progressive_tax
The withholding is calculated by extrapolating how much you’d owe in taxes if you earned this amount for every paycheck. If you know how much you’re projected to earn over the year, you could ask whomever handles your pay to adjust it to the correct percentage. Either way, come tax time it’ll be settled and you’ll either get back however much you paid in excess, or you’ll have to pay a bit extra at the end of the year.
earnings are highly variable. the best I can do is I keep a spreadsheet, on which I calculate hourly and weekly and monthly averages. And I’ve only been there a month so not enough data to extrapolate from yet.
well thanks, they are deducting so much from me (26% ?!) that I certainly would be due a refund. Were it not for another tragic turn in my personal circumstances, in which the IRS has been garnishing all of my tax refunds since 2014 because of something stupid my ex-husband did in 2009 😡
This is how the tax rate works. As for your fear of them taking 100%, they won’t. The max single-payer tax rate, as of 2023, was 37%.
Thank you 🙏
Taxes can be complex, but is relatively simple for most people. Here’s how it works in general (assuming you’re a single tax filer):
And so on. You’ll always pay FICA taxes, and the more you earn, the more of your income is taxed at a higher rate.
So if you were taxed 9% of your income, your employer probably estimated your yearly pay to be about $16k if the 9% is combined with FICA (if separate, it would be about $60k). If you are taxed 26%, I estimate your income at $210k if it includes FICA ($375k without). If you’re including state tax, then I estimate your income to be around $85k for a state like California with high state income taxes. I used this estimator to come up with numbers.
So your payroll department is probably estimating numbers similarly. If you think they’re doing it wrong, they probably don’t have enough information and you may need to provide them a W-4, which tells them how many deductions you expect this year (i.e. if you have a kid or something, you’ll get a tax credit, and can probably file as head of household instead of single).
If you provide income numbers, living situation (married, single with kids, single no kids), and where you live (just state is fine, unless your city has income tax as well), I can estimate your tax obligation and help you understand what payroll is probably doing. Withholding is based on estimated yearly income, so start with that.
That sucks. I assume this is because of back taxes. If you have savings, you probably want to pay it off sooner than just having the IRS reclaim it through tax refunds. I would need to know more about the situation, but there may be interest involved. And my understanding is that the IRS usually takes a percentage of income as well, so it’s possible part of your “taxes” are back payments.
Regardless, I can probably help you minimize your refund at the end of the year if you provide me some numbers. Ideally, you’d talk to a tax professional because I don’t know anything about wage garnishment and that obligations you may have to the IRS.