<prompt> Human: So Im really confused about this. Maybe someone can shed some light. My wife and I both work at the same place. I started in June of 2017 and only made about 4500 Im a college studentShe made roughly around 34000 last year. She is the payroll account at our job and told me because I made so little I didnt have to pay federal income tax. And that Sage 50 Peachtree is setup to not deduct federal income tax if your pay is below a certain amount.So when I went to get everything in order to file our taxes online I started entering our 2017 wages and I entered hers and it said estimated refund 450 dollarsWhen I entered my income it says estimated refund 25 dollarsSo why is it that she gets a 450 dollar refund but I didnt make enough to pay income tax, and yet its saying basically I owe them 425? Were filing Married Filling Jointly btw.Was she wrong to not deduct federal income tax from my pay?Any insight would be great because shes just as confused as I am.  <response>: Your income by itself is not enough to owe any tax. But your income plus wifes income together is enough to owe more than what your wife would owe by herself.If you really want to think about it in a simplistic way, imagine you pour your income in first. It fills 4500 of the 20800 space you get as married couple that has tax at 0 rate standard deduction and exemptions. Next, add wifes W-2. First 16300 of her income is taxed at 0 to fill up that 20800 space and the rest, 17700, is taxed at 10. Tax about 1770.If you prefer, you can think of her W-2 being poured in first. 20800 is taxed at 0, then 13200 taxed at 10 1320, and then all of your 4500 is taxed at 10 450. Tax still 1770.What your workplace sees for your paychecks is that you said you are married, and your paychecks were of a size that the system imagines your annual income is 9000. Ity knows married person gets 20800 not taxed. The system presumes only one earner in married couple you and of course the system has no idea about your wifes income, because there is no way that payroll departments communicate this to some central big brother. So it knows 9000 20800 would be negative, so it judges your taxable income will be zero, so it takes nothing out. It is following its orders and has no idea your wife has income. The withholding of zero dollars is correct for you because the system believes you owe no tax. Dont blame the withholding algorithm for your not filling your W-4 out correctly.When married couple both have incomes, they have to take special steps to not underpay. There is a two earner worksheet to do this on back page of W-4.In your case things worked out okay, as wife slightly overpaid and thus you do get some refund.Wife ended up having withholding over 1770, rather than having just 1320 taken, which might have happened had she used Married-3 on her W-4. Good thing she didnt do that, because then you would have been 450 short. Maybe she used Married-2 on her W-4. That would have tricked the system into thinking her income was 34000 4050, which is actually pretty close to what your joint income was.In an ideal world, perhaps you might feel that if wife earned 3400038500 of your combined income, she should have had 3400038500 1770 1563 withheld, and you should have had 450038500 1770 207 withheld. There could have been a way to force that to happen on your W-4, but its not necessary. IRS is fine with wife paying in all the tax and you paying in 0. Indeed, that level of granularity is hard to achieve with W-4 unless you use special amounts on line 6. If the IRS withholding calculator were online and you fed it your income and work months, I bet it would have told wife to use Married 2 and you to use Married 0 still having nothing withheld. 