Thank you for reaching out to the Community forum with such thorough information, missjulia101. I'll share insights regarding incorrect Federal Income Tax withholdings in QuickBooks Desktop Payroll.
QuickBooks Desktop (QBDT) computes Federal Income Tax (FIT) withholding using the wage bracket method as specified in IRS Publication 15-T, rather than relying on an annualized percentage method. This ensures that FIT amounts are adjusted for each paycheck based on factors like bonuses or additional pay, which may vary throughout the year. Additionally, these calculations conform to the latest tax table for 2025.
For additional details, you can refer to this article: Understand how your payroll taxes are calculated.
Meanwhile, if your W-4 tax settings are correct, then you should not be concerned about any incorrect calculations regarding withholding taxes in your employees' paychecks. It’s essential to ensure that the information provided on the W-4 forms is accurate and up-to-date, as this directly impacts how much federal income tax is withheld from each paycheck.
You can view this thread for further information about how QuickBooks calculates FIT: https://quickbooks.intuit.com/learn-support/en-us/employees-and-payroll/re-qbdt-withholding-the-wron...
Furthermore, here's an article you can read about the year-end checklist for preparing your tax forms in QuickBooks Desktop Payroll: Year-end checklist for QuickBooks Desktop Payroll.
I'm still ready to back you up if you need more help handling payroll. I'll keep the thread open so you can comment back.
