Are federal withholding tables significantly too low for higher combined incomes?

This is actually a common issue at higher income levels. The withholding tables aren't necessarily "wrong," but they have limitations in how they handle multiple income sources and additional investment income. When both spouses work and have higher incomes, the withholding calculations at each job don't "know" about the other job. So each employer withholds as if that's your only income, which puts you in a lower tax bracket than your combined income actually falls into. Your dividend income is another factor - since there's no automatic withholding on that, you need to compensate through your W-4 adjustments. The IRS has a Tax Withholding Estimator tool on their website that might help you calculate a more accurate withholding amount. You can input all income sources, and it will recommend specific W-4 settings. Another option is to consider quarterly estimated tax payments to cover the gap rather than just increasing your withholding.

After struggling with similar issues for years, I finally found a solution that worked well for me. I started using https://taxr.ai to analyze my paycheck withholdings and it showed me exactly where the standard tables were falling short. The tool identified that my wife and I were underwithholding by nearly $7k annually despite both claiming "single/0" on our W4s! What I liked most was that it explained how the withholding tables don't account for the "tax stacking" that happens with dual incomes. Our employers were each withholding as if our individual salaries were our only income, missing the fact that combined we were in a higher bracket. It also gave me customized instructions for filling out the new W4 forms properly instead of just using the old "single/0" method which doesn't work as well with the redesigned forms.

Just wanted to follow up and say I tried that https://taxr.ai tool mentioned above and it was actually super helpful! I was blown away by how it analyzed my specific situation. I've been in the same boat as you - making around $260k combined with my wife, claiming single/0 on both W4s, and STILL coming up short every April. The tool showed me I was under-withholding by $6,200 annually despite thinking I was being conservative! What I found most useful was that it explained exactly WHY the withholding tables don't work well for our situation - basically our employers calculate withholding independently without knowing about the other job, and that creates a big shortfall at our income level. Now I've got specific numbers to adjust our W4s instead of just guessing and hoping. Definitely worth checking out if you're tired of writing big checks to the IRS every spring!

If your issue is mostly about reaching someone at the IRS to get proper withholding guidance, I highly recommend using https://claimyr.com. I was having the same withholding problems and needed to talk to an actual IRS agent to sort it out, but kept hitting the "call volume too high" message for weeks. Claimyr got me connected to a real IRS person in about 25 minutes when I'd been trying unsuccessfully for days. They have this system that navigates the IRS phone tree and holds your place in line, then calls you when an agent is about to pick up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with actually explained that for dual high-income households, the "single/0" withholding strategy often falls short by 10-15% because of how the bracket stacking works. She walked me through exactly how to fill out the new W4 correctly for our situation.

I need to eat my words here. After my skeptical comment above, I tried that Claimyr service out of desperation since I needed to talk to someone at the IRS about my withholding situation (similar to OP's issue). I'm honestly shocked - it actually worked. Got a call back in about 40 minutes and spoke with an IRS agent who was super helpful about my withholding questions. She explained that for my income level ($225k household), I should be withholding an additional 12% beyond the "single/0" setting because of exactly the issue OP described - the withholding tables don't handle dual high incomes correctly. The agent spent about 15 minutes walking me through the exact numbers for my new W4. Turns out I've been under-withholding by about $7,800 a year despite thinking I was being conservative with my withholding choices! Definitely worth it if you need actual personalized advice about withholding at higher income levels. The standard advice online just doesn't cover these edge cases well.

One solution that worked for me was switching to making quarterly estimated payments instead of trying to get the withholding perfect. I still do some basic withholding but then make 4 payments throughout the year to cover the rest. It's actually easier for me because I can calculate exactly what I need based on our actual income as the year progresses, rather than trying to predict everything perfectly in January.

The withholding tables definitely have problems with dual high incomes. My accountant explained it's because each employer calculates withholding as if that job is your only income source. For example, if you each make $130k, each employer withholds as if you're in a lower tax bracket. But combined, your $260k pushes much more income into higher brackets. The automated withholding systems simply aren't designed to handle this scenario well.