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Tax withholding with salary increase

Last school year I worked part time for our school district, making around $26,000 for the year.  During that tax year, $62.42 was taken our for federal income tax each month.  This school year (beginning with my August paycheck) I am now a full time employee.  My full year salary will now be around $57,000.  This paycheck, the amount taken out for federal income tax went up to $373.04.  Why would the withholding go up so much? 


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Featured Answer by WalletPop's Tracy L. Coenen

 
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Tracy L. Coenen is WalletPop's Tax Expert and Fraud Expert

 

 

Because you are making so much more, you are put into a higher tax bracket and that is the cause for higher withholding on your paychecks.
Posted 2008-09-02T17:28:40Z
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You were under-withheld as a part time employee. They should having been withholding at least 10 - 15%.  You may very well be in a higher tax bracket now, and it would also depend on how you filled out your W-4.  If you are married, you will need to look at what tax bracket your combined incomes will put you in, and make sure you're covered. If you are over or underwithheld, file a new W-4 with your employer.  You can lower your taxable income by participating in your school district's 403b plan (retirement) if you're eligible.

Eva

 

 
Posted 2008-09-08T16:00:49Z
Tax Fairy was invited by Yedda to answer this question.

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Depending on your state and deductions you may have been in a lower tax bracket last year (10-15%). Now you're makin' the big bucks and may have moved up to a 20-28% bracket. The Govment promises they will refund it to you when they are done using it this year(LOL).  You may be able to adjust your deductions to get that 373.00 number down, just be happy to get a refund next year!
Posted 2008-09-30T02:31:12Z
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