Was there a change in federal income tax withholding in the past year?
I’m an income tax preparer and have noticed that nearly everyone had less withheld from their wages this year (’21) compared to last year (’20). Almost all of them haven’t made any changes to their W-4’s so we cannot figure out what changed. Have you heard of anything that would cause this? Thank you for your assistance!
Terry Says
That’s because the standard deduction increased a bit (based on inflation adjustments). For example it jumped to $12,960 for single filers and $25,900 for married filing jointly. That reduces your income a bit. And most large companies adjusted their withholding downward a bit to reflect the lower income tax obligation.
