I filed exempt on my w-4 for my new job. Why are they still taking out almost $40 a week in taxes?

Question

I thought exempt status means that you don't owe any taxes from previous years and are not expected to owe any this year. This is true in my case, I have 4 children, am not married and make under $30K a year and never owe any taxes.

Answer 1

File a fresh W4. You will still pay FICA taxes at 6.2% plus 1.45%

Read more about the allowances you should claim on W4: http://taxipay.blogspot.com/2008/02/fili...

Answer 2

they still take taxes out every week but at the end of the year you will get it all back

Answer 3

The W-4 applies to income tax only.  Social security (6.2%) and medicare (1.45%) withholdings (which may be called FICA, OASDI, or various other things) are still required.  Your income of $30K/yr comes to $576.69 per week, which makes the required social security and medicare withholdings $44.13.  They should be taking out MORE than you say they are.

Answer 4

You are not exempt from FICA and Medicare which is 7.65% of your gross income. You are correct in filing exempt the Federal withholding should not be deducted. However, every year you must file a new W-4 claiming exempt.

Exemption from withholding. Your exemption

expires February 16th. FYI

30,000/52=576.92

576.92*7.65%=44.13 (FICA/Medicare)

Answer 5

Well you can't escape social security or medicare taxes

even when you are exempt, about 8%

and be careful, if your tax situation changes, not to get caught claiming exempt when you're not exempt

BTW it's exempt from FIT, and maybe SIT

Answer 6

Exempt just mean exempt from federal income tax.  In your question description, every time you use the word "taxes", read it back to yourself but say "income taxes" and you would be right.  There are still Social Security tax of 6.2% and Medicare tax of 1.45% which nobody is exempt from.  

There may also be state and local taxes taken out depending on where you live whether your employer uses your federal W-4 to determine your state tax status.  Look on your check stub to see what actual taxes are being taken out.  You may need to fill out and submit your state's equivalent to the W-4 to your employer to be exempt from state taxes.  Before you do that, make sure you are really exempt from state taxes - I have a lot of clients who have no federal income tax but do have a state income tax so they cannot be state exempt.