Why do I keep owing taxes?

[trea12]

I have been owing taxes for the last two years and I'm very confused as to how the IRS isn't taking out everything they need from the beginning. I have only (1) W2,  I don't own any property, nor have any dependents, I got health insurance through my job, I contribute to 401k, where it puts my taxable income well within 12%. I feel like this is the most basic file taxes can get, and before 2022 I never owed any taxes.

I've been told we can no longer claim ourselves.  I also know they took a way most people can claim deductions like new cars, moving expenses, or any work-related expenses if you have a W2 and aren't a government official... But I need someone to break down like I'm 5, what has changed where now the government is no longer even calculating their taxes properly 

[Vanessa A]

How much are you having to pay in?

The government does not do the calculations on what you have withheld from your wages.  When you start a job your employer should give you a W-4.  On this W-4 you will answer questions and then your employer is responsible for withholding the correct amount from your wages based on what you told them on the W-4. 

The laws changed back in 2018, so if it had to do with the laws changing, you should have noticed this many years before 2022.  A new vehicle was never deductible as a personal expense and commuting back and forth to work was also not deductible under the previous rules.  As for claiming yourself, yes, prior to 2018 you were able to take a personal exemption for yourself, but the standard deduction was MUCH lower.  In 2017, the personal exemption was $4,050 and the standard deduction was $6,350 for a total of $10,400 for a single person with no dependents.  For 2024, the standard deduction for a single person with no children is $14,600.  So for a person who does not own property, a large percentage, make out better.  

If you were not having to pay in prior to 2022, then it is likely because:

1. You are making more money and you were previously able to get the Earned Income Tax Credit
2. You employer is not withholding enough for some reason
   •  whether it be the way you did your W4 and claimed you had deductions other than the standard deduction or,
   •  they are not withholding taxes on your 401K contributions and then mistakenly including them in your box 1 of your W2 or
     • If box 1 is less than box 3 and 5 then this is not the problem,
   •  they are miscalculating. 

To fix this you can fill out a new W4 and give it to your employer. You can choose to have an additional amount withheld that would cover what you have to pay in.  For example, if you have to pay $600 in every year, you can choose to have an additional $15 per week extra withheld which will cover that $600. 

You can use Publication 15-T to compare your withholdings on your pay stubs to the amount in the book that should be withheld.  The tables you would use start on page 13.  Say you make $765 per week you will  scroll down to the bottom of page 13 and go over to the single or filing separate column, which is the next to last column and compare what was withheld on your check to that $53 was withheld.  The very last column would be the amount withheld if you marked on your W4 that you had more than one job.