I have claimed 1 exemption my entire life and single. I always received $1400 back each year consistently. The past two years with an INCREASED income, I now owe money?

[caitlin0419844]

I'm really confused how I make MORE money, claim the same exact status and owe money. It makes absolutely no sense to me.

[DoninGA]

The exemptions on a W-4 were removed in tax year 2018.  You need to give your employer a new W-4

Go to this IRS website for the tax withholding estimator for a W-4 - https://www.irs.gov/individuals/tax-withholding-estimator

[xmasbaby0]

More income = more tax

Use the W-4 calculator and decide if changing your withholding amount will be better for you.  Keep in mind, a big tax refund only means you  provided the government with an interest free loan all year instead of getting your money during the year.   But if you now owe---you are not having enough withheld.

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

https://www.irs.gov/pub/irs-pdf/fw4.pdf

[Opus 17]

Have you filed a new W-4 recently? It doesn’t use exemptions anymore, or at least, not in the same way as the old form did.  While the W-4 system is supposed to result in a modest refund for most taxpayers, and is supposed to keep up with changes in income, it doesn’t always work, depending on each individuals tax situation.

The only way to really know what changed, would be to compare your 2022 paystubs and tax return with your 2023 paystubs and tax return, and with the 2022 and 2023 tax withholding tables found in publication 15-T.  You might have a change in your situation that has a larger impact than you expected, or your employer might have switched from using old rules to new rules for processing the W-4 instructions.  if you filled out a new W-4 recently, without looking at the new instructions, you might’ve filled it out incorrectly. But no one on this board can tell you exactly what happened.  

[Hal_Al]

  It's a mistake to compare only the amount you're getting back to last year. You have to compare all the numbers. Lay last year's form 1040 next to this year and do a line by line comparison. 

The increased income, alone, could be the explanation.  It could be you just entered something wrong. 

We cannot see your return. So, without more info, we cannot explain it. 

[Vanessa A]

The simplest answer is, the more money you make the more you pay in taxes. For instance, if you made $50,000 this year and Joe Somebody makes $15,000, and you are both single.  You will have taxable income of $36,150 while Joe will only have taxable income of $1,150.  

Joe will have $150 in tax liability because his income all falls in the 10% bracket.  ($1,150 x 10%=150) 

You on the other hand will have a tax liability of $4,118 as you will be in the 12% bracket.  The first $11,000 will be taxed at 10% then the rest will be taxed at 12%.  

              $36,150-11,000=25,150

               $11,000x  10%= 1,100

               $25,150 x 12%= 3,018

               1,100+3,018= 4,018

So if Joe had $1,500 withheld and you had $1,500 withheld, Joe would be getting a refund, while you would owe taxes. 

If you are single with no children and not in school, there are not a lot of credits available to change your taxes due. If you are having to pay in now or would like to increase your refund, you may want to change your W4  with your employer. You can choose to have an additional amount withheld.  

Also, if you have multiple jobs, your employers are likely withholding only for your wages at that job.  You would want to redo your W-4 so that it reflects a higher income.  There is also a spot to note that you have more than one job.