I file head of house hold with 2 dependents why was there no federal taxes withheld from my income in 2021?

[xmasbaby0]

That is either a result of the W-4 you filled out for your employer---or a question to ask your employer.   Or were you paid as an independent contractor?  Was Social Security and Medicare withheld from your pay?

[Mike9241]

since our crystal ball is broken what type of income?  

[Opus 17 · Accepted solution]

What is your income?  Filing HOH with 2 dependents (if under age 18), you should expect that the first $58,000-$78,000 of your income will be covered by your standard deduction and the child tax credit.  Any withholding would only be a tax-free loan to the government that you would get back as a refund (by having your weekly checks reduced).  If your income is higher, or if your income is lower but you want to have more tax withheld to get a higher refund, you need to change the W-4 you file with your employer.

Did you only notice this now on your W-2?  You didn't check your pay stubs during the year?  It's also possible your employer put your W-4 in their payroll system incorrectly, that would be on you to bring to their attention.

Or, if you are self-employed or an independent contractor, your clients never withhold taxes for you, it is your responsibility to make estimated tax payments to the IRS at least every quarter. 

[sierra3431]

Yes they where both taken out. I did speak to my hr and she said bc I filed held house and claimed 2 that,that is the reason. Something changed last year with all that. I don’t have to pay in or anything but fed taxes are still not coming out in 2022 paychecks. I’m wondering if I need to file single with 0 dependents now??? I just don’t want to owe the irs if this continues.

[sierra3431]

40,000.00 and I’m employed full time. I have filed this way for years and it’s never been like that … thank you for your reply

[sierra3431]

My age is 33

[Opus 17]

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@sierra3431 wrote:

Yes they where both taken out. I did speak to my hr and she said bc I filed held house and claimed 2 that,that is the reason. Something changed last year with all that. I don’t have to pay in or anything but fed taxes are still not coming out in 2022 paychecks. I’m wondering if I need to file single with 0 dependents now??? I just don’t want to owe the irs if this continues.

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What?

The W-4 is only a form to estimate your tax withholding.  You need to file you tax return based on your actual facts (income, dependents, and so on) no matter what your W-4 says or what your withholding is.

Do you mean change your W-4 to have less tax taken out?  That's up to you.  But it's not necessary.  The formula used by your employer to determine your withholding "floats" with your income.  If your income for a certain pay period is high enough that you would be expected to owe tax, you will have the right amount of withholding taken out.  If your Income is lower, you will have less or no tax taken out.  The formula is self-adjusting, you shouldn't have to do anything.

There was a change in 2019, the formula used with the old W-4 forms gave most people a refund.  The new formula is more accurate, and you are more likely to get a smaller refund or break even.  This is good for most people, because it's better to have the money in your weekly pay check instead of having to ask the IRS to send it to you at the end of the year (especially when they are backlogged or close down for months due to a pandemic).  

For 2021, if you changed your withholding to HOH plus 1, you would start having taxes taken out at an annual salary of around $38,000 ($730 per week).  If you changed all the way down to single plus 0, your taxes would start if your wages were more than $243 per week.  But at a gross salary of $40,000, you would be giving up $60 per week, or $2900 per year, to the IRS, that you would get back as a refund (plus a little extra refund for the child tax credit).  Would you rather have $60 a week more for necessities, or a $2900 refund? 

[sierra3431]

I have filed this way for at least 6 years and I have always had Federal taxes took from my income that has ranged from 30-45,000. I was surprised to see this wasn’t deducted “like usual” but everything else was taken out ssi, retirement, etc. I’m going keep my filing static the way it’s suppose to be. Like you said, with the changes that was made for that particular year, Everything should have adjusted accordingly. Being my yearly income fell in a different tax bracket then what it has been, therefore no federal taxes where took out… correct?!

[Opus 17]

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@sierra3431 wrote:

I have filed this way for at least 6 years and I have always had Federal taxes took from my income that has ranged from 30-45,000. I was surprised to see this wasn’t deducted “like usual” but everything else was taken out ssi, retirement, etc. I’m going keep my filing static the way it’s suppose to be. Like you said, with the changes that was made for that particular year, Everything should have adjusted accordingly. Being my yearly income fell in a different tax bracket then what it has been, therefore no federal taxes where took out… correct?!

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More tax taken out will mean more refund, in your situation.  2021 is also a little messed up because of the temporary increase in the child tax credit.  Your W-4 should be self-adjusting and you should have tax taken out when your income is high enough to require it.

You can use the IRS calculator to double check.  It's out of service to be updated for 2022, but when it is available, you answer questions about your family and your income, using your most recent pay stub, and the calculator will give you a pretty good report on your expected taxes and refund.

https://www.irs.gov/individuals/tax-withholding-estimator

If you get a new job or your income changes, you can re-check the calculator to see if you are still on track. 

[sierra3431]

You are the Best! Thank you so much for your time and help!!   It’s Greatly appreciated 

[tuscaloosakid]

My daughter had a similar problem.  She is single and claimed 2 allowances on her W4 back in 2018.  She had federal withholding on most of her wages in 2020 and then toward the end of the year it went to zero.  We didn't notice because she got a refund.  

This year (2021) no federal taxes were withheld from her income and all of a sudden she owes a lot.  I did some digging based on questions she asked HR.  They said that her withholding was based off of the new W4 from 2020, even though she never filled out one as was not required to.  I found this from the IRS, which was implemented to make it easier on employers.  If I read this correctly, based on number 3 below, they multiplied her allowances (2) by $4,300.  So, they are saying line 4(b) would now have $8,600 in deductions to withholding.  Could this have caused no federal withholding?   She make 43,000 a year and she owes $3,00.  This was totally unexpected and will be a burden for her.  

How To Treat 2019 and Earlier Forms W-4 as if They Were 2020 or later Forms W-4

Employers may use an optional computational bridge to treat 2019 or earlier Forms W-4 as if they were 2020 or later Forms W-4 for purposes of figuring federal income tax withholding. This computational bridge allows you to use computational procedures and data fields for a 2020 and later Form W-4 to arrive at the equivalent withholding for an employee that would have applied using the computational procedures and data fields on a 2019 or earlier Form W-4. You must make up to four adjustments to use this computational bridge.

1. Select the filing status in Step 1(c) of a 2020 or later Form W-4 that most accurately reflects the employee’s marital status on line 3 of a 2019 or earlier Form W-4. Treat the employee as “Single or Married filing separately” on a 2020 or later Form W-4 if the employee selected either “Single” or “Married, but withhold at higher single rate” as their marital status on their 2019 or earlier Form W-4. Treat the employee as “Married filing jointly” on a 2020 or later Form W-4 if the employee selected “Married” as their marital status on their 2019 or earlier Form W-4. You can’t convert an employee to a filing status of “Head of household” using this computational bridge.
2. Enter an amount in Step 4(a) on a 2020 or later Form W-4 based on the filing status that you determined in (1) above when you converted the employee’s marital status on a 2019 or earlier Form W-4. Enter $8,600 if the employee’s filing status is “Single or Married filing separately” or $12,900 if the employee’s filing status is “Married filing jointly.”
3. Multiply the number of allowances claimed on line 5 of an employee’s 2019 or earlier Form W-4 by $4,300 and enter the result in Step 4(b) on a 2020 or later Form W-4.
4. Enter the additional amount of withholding requested by the employee on line 6 of their 2019 or earlier Form W-4 in Step 4(c) of a 2020 or later Form W-4.

.This computational bridge applies only for Forms W-4 that were in effect on or before December 31, 2019, and that continue in effect because an employee didn’t submit a 2020 or later Form W-4. If an employee is either required, or chooses, to submit a new Form W-4, it doesn’t change the requirement that the employee must use the current year’s revision of Form W-4. Upon putting in effect a new Form W-4 from an employee, you must stop using this computational bridge for the applicable year of the new Form W-4. An employer using the computational bridge for a Form W-4 furnished by an employee must retain the Form W-4 for its records..

[sierra3431]

Thank you for the information!

[ThomasM125]

Your tax withheld is determined by the information you enter on the W-4 form your employer gives you when you are hired and how much your wages are. Your income may have been below the level that would require you to pay income tax, and if so no tax would be withheld from your wages.

[sierra3431]

There has not been any federal taxes taken out of my income this year either.I’ll make more money this year and I just don’t want to have to pay in. The reason for the confusion is my Friend filled the same way but with higher income (more like what mine will be this year) and she surprisingly has to pay in….    She’s never paid in before.