Introduction to Federal Tax Withholding for Part-Time Employees

As a part-time employee earning about $200 every two weeks, you might wonder why federal taxes are not being withheld. This article explains the reasons behind this situation and provides guidance on how to correct it.

Understanding IRS Tax Withholding Rules

The IRS has strict rules regarding how federal taxes should be withheld from paychecks. Regardless of your personal tax situation or your number of jobs, the withholding rules are standardized. They assume you have one job, thus the employer may not withold federal taxes if your earnings are below a certain threshold. For 2023, the IRS allows employers to not withhold taxes if an employee’s wages are below a certain amount.

The Role of the W-4 Form and Allowances

The W-4 form is your primary tool to control how much federal tax is withheld from your paycheck. When you indicated 0 allowances on your W-4 and stated that you are married, this likely led to no federal income tax being withheld. The number of allowances you claim can significantly impact the amount of taxes withheld. For married individuals, especially those where the spouse has no income, it may be more appropriate to use 1 allowance.

Using the Tax Withholding Estimator

The IRS provides a Tax Withholding Estimator tool on their website. This tool can help you determine the appropriate amount of tax to withhold based on your specific situation. You can input your gross income, filing status, and other relevant details to get a better idea of how much tax should be withheld.

Steps to Correct Federal Tax Withholding

Fill Out Your W-4 Again: Consider revising your W-4 form to better reflect your current tax situation. If you are unsure about how to fill it out, consult with a tax professional for guidance. Use the IRS Withholding Estimator: This tool can help you accurately determine the withholding amount based on your expected income and filing status. Monitor Your Earnings: If your income changes, remember to revisit your withholding settings to ensure you do not owe taxes at the end of the year.

Conclusion

By understanding and adjusting your federal tax withholding, you can ensure that the correct amount of taxes is deducted from your paychecks. This process involves reviewing your W-4, using the IRS Withholding Estimator, and monitoring your earnings throughout the year. Taking these steps can help you avoid any surprises at tax time and ensure you are not facing an unexpected tax bill.