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Every year I owe Federal Income Taxes instead of a Return. I was told by the IRS I my employer is not taking out enough Federal Income Tax. What percentage of your salary should be taken out for Federal Taxes?

 
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PoojaT27
Employee Tax Expert

Every year I owe Federal Income Taxes instead of a Return. I was told by the IRS I my employer is not taking out enough Federal Income Tax. What percentage of your salary should be taken out for Federal Taxes?

Hello,

Thank you for participating. 

Life events such as marriage, divorce, having a baby, or getting a promotion or bonus can have a big impact on your taxes. Filling out a new Form W-4 tells your employer how to calculate federal income tax withholding for your paycheck. That way, you won't wind up owing a big tax bill or having too much money withheld from your paycheck throughout the year.

  • If it's been a while since you filled out Form W-4, you should know that the form was entirely redesigned.
  • The Tax Cuts and Jobs Act of 2017 significantly changed federal tax laws, so workers and their employers needed a more up-to-date form to calculate the amount of federal tax to withhold.

How to Estimate Federal Withholding 

Turbo tax also has a W 4 Calculator that you can use to calculate the withholding. You should update your withholding every time there is a major life event or you get a new/second job or get a substantial raise. You can use the link below to calculate your withholding.

W-4 Calculator 2022 

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