@Crandalld wrote:
As a result of these findings, my federal tax withholding was reduced by $3,255.67
Why would this have not also reduced a portion of my taxable income?
Could you clarify what exactly was reduced? Are you referring to the amount of Social Security tax withholding (Box 4 of your W-2)? Or are you referring to regular federal income tax withholding (Box 2 of your W-2)?
Box 4 of your W-4 makes sense if you hit the Social Security maximum. It is limited to a certain amount so if they had originally had it set up as paying too much, they would need to correct it.
Relocation assistance is still subject to taxes, and due to a law change from a few years ago reimbursement for moving expenses is taxable as well. It is just like receiving a bonus, subject to all of the usual taxes.
Does that answer your questions? If you have further questions, maybe you can clarify and expend the details about what exactly was reduced.
