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leslie81639
April 1, 2025
Solved

Federal withholding drastically changing from 2023 to 2024

  • April 1, 2025
  • 2 replies
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I had an employee who started halfway through the year in 2023. Based on their W4 QuickBooks withheld $228 of federal taxes per check. Then in 2024 it decreased it to $55 per check. The $55 is correct per the IRS worksheet yet upon doing their tax return they owe a lot of money to the IRS, so they obviously do not believe enough was withheld. But they employee is still upset wanting to understand why QuickBooks withheld so much in 2023 and then it suddenly decreased in 2024. Further my company now has concerns QuickBooks is dependable. 

Best answer by leslie81639

@leslie81639 

 

Is this for biweekly payroll?  If so, there doesn't seem to be any issue with how much QB is withholding.  If your employee owes "a lot" in taxes, it's clear there's a disconnect between their income ($97K) and W-4 information, and their actual tax return.

 

Here's the employee's 2024 projected tax liability based on income and W-4 information ($97K, MFJ, no multiple jobs, standard deduction, $6,000 in dependent credits):

-Salary = $97,000
-MFJ standard deduction = -$29,200
-Taxable income = $67,800 (97,000 - 29,200)
-Tax due on $67,800 = $7,672 (10% on first $23,200 and 12% on the remaining $44,600)
-Less qualifying dependent credits of $6,000 = Total tax owed = $1,672 ($64 biweekly or $32 weekly). 

If your employee is paid bi-weekly (26 pay periods) and had $55 withheld each paycheck, they had $1,430 withheld and would only owe $242 (1,672 - 1,430).  


FOUND THE PROBLEM! Actually, figured out that the employee W4 was entered incorrectly in 2023 causing a higher withholding which turned out to be in the employee favor. 

2 replies

Candice C
Candice C
April 1, 2025

Hey there, @leslie81639. 

 

It's great to see you back in the Community! I hate to hear that your employee is having concerns with their federal withholding. 

 

Based on the details you gave, I recommend contacting our Customer Support Team so they can take a further look into this issue. Here's how in the system: 

 

  1. Go to the Help menu. 
  2. Press the QuickBooks Desktop Help option. 
  3. Tap the Contact Us button. 
  4. Enter your concerns and hit Let's talk. 
  5. Scroll down and choose to Get a callback. 

 

Please come back and let us know how the call goes. I'm only a post away if you have any other questions. Take care! 

L
leslie81639Author
April 1, 2025

I did try this but they were unable to help. 

Rainflurry
Rainflurry
April 1, 2025

@leslie81639 

 

It's difficult to say why the 2023 withholding was so much higher.  Did you use the proper hire date?  

 

At this point, I'm not sure why it matters.  In 2024, QB was withholding the proper amount based on the tax tables of IRS Pub. 15-T, correct?  That's all you can expect of a payroll system.  If your employee owes a significant amount in taxes, they must have more income or fewer deductions than their W-4 reflects.  They should look at their W-4 and adjust it appropriately. 

 

Can you share the employee's W4 info and salary/pay rate?  This is anonymous so no personal info obviously.      

    L
    leslie81639Author
    April 1, 2025

    For 2023- $90,000 salary

    W4 is married filing jointly, $6,000 for qualifying children, no additional withholdings

    box 2 not checked

     

    For 2024 $97,000 salary

    no changes to W4

     

    I ran the worksheets from the IRS pub 15-T 2023 & 2024 worksheet both the bracket methods and the percentage methods. Here are my results below compared to what QB actually withheld.

     

    2023

    Bracket method- $29.00 

    Percentage method $29.68

    QB withheld $228.00

     

    2024

    Bracket method- $57

    Percentage method $55.08

    QB withheld $55

    Rainflurry
    Rainflurry
    April 2, 2025

    @leslie81639 

     

    Is this for biweekly payroll?  If so, there doesn't seem to be any issue with how much QB is withholding.  If your employee owes "a lot" in taxes, it's clear there's a disconnect between their income ($97K) and W-4 information, and their actual tax return.

     

    Here's the employee's 2024 projected tax liability based on income and W-4 information ($97K, MFJ, no multiple jobs, standard deduction, $6,000 in dependent credits):

    -Salary = $97,000
    -MFJ standard deduction = -$29,200
    -Taxable income = $67,800 (97,000 - 29,200)
    -Tax due on $67,800 = $7,672 (10% on first $23,200 and 12% on the remaining $44,600)
    -Less qualifying dependent credits of $6,000 = Total tax owed = $1,672 ($64 biweekly or $32 weekly). 

    If your employee is paid bi-weekly (26 pay periods) and had $55 withheld each paycheck, they had $1,430 withheld and would only owe $242 (1,672 - 1,430).  

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