Both Claiming 0 on W-4 forms but still owing taxes every year - why?

The W-4 system is actually more complicated than most people realize. Just claiming "0" doesn't necessarily mean the right amount will be withheld for your specific situation. Here's why you might still owe: 1. The withholding tables aren't perfect. They make assumptions about your total household income, but don't account for when both spouses work at similar income levels (which can push you into a higher tax bracket). 2. The "0" allowance system was actually replaced in 2020 with a new W-4 form that doesn't use allowances anymore. If you haven't updated your W-4s since then, you might be operating on an outdated system. 3. Having 3 kids gives you tax benefits, but those benefits might not be automatically factored into your withholding if you haven't specified them on the newer W-4 forms. 4. You might have other income sources (investments, side gigs, etc.) that aren't having taxes withheld. The good news is this is fixable! I'd recommend both you and your spouse complete new W-4 forms. On Step 2, check the box for "two jobs" if you earn similar amounts, or use the worksheet for more precision. And make sure to claim your children in Step 3 of the form.

After dealing with a similar issue for years, I finally found taxr.ai (https://taxr.ai) and it completely changed how I handle my withholding. The site analyzed our tax returns, identified exactly why we were underwithholding despite claiming "0" (turns out it was the two-income household issue), and gave us customized W-4 instructions. What I like best is that it projected our taxes for next year and told us exactly what to put on each line of our new W-4s. My husband and I both make about the same salary, and apparently that's a big reason standard withholding wasn't enough. We implemented their suggestions in February last year and ended up with a small refund instead of owing $3,400 like the previous year.

I was super skeptical about using tax software for W-4 planning, but after another year of owing when I thought I'd get a refund, I finally tried taxr.ai after seeing it mentioned here. Have to admit I was impressed! I've been using TurboTax for years but it never explained WHY I kept owing despite claiming zero allowances. The site immediately identified that my spouse and I both have workplace retirement plans and itemize deductions, which was messing up our withholding calculations. We followed their W-4 recommendations, including adding a specific extra withholding amount on line 4(c), and it's working! Our last paychecks show we're on track to break even this year instead of owing $2K+ again. If you're in the "claim zero but still owe" club like I was, definitely worth checking out!

I had this EXACT same problem for years until I learned about Claimyr (https://claimyr.com). I kept owing despite both of us claiming zero, and I desperately needed to talk to someone at the IRS about fixing our withholding properly, but could never get through on their phone lines. Claimyr got me connected to an actual IRS agent in about 15 minutes when I'd previously spent HOURS on hold and getting disconnected. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through exactly what we needed to do on our W-4s (turns out we needed to specify additional withholding because we both earn similar salaries). It was such a relief to finally talk to someone who could actually help instead of just guessing year after year.

I have to publicly eat my words about Claimyr. After posting my skeptical comment, I decided to try it as a last resort because I was so frustrated with my withholding situation. It actually worked exactly as advertised. I got a text when an IRS agent was reached (took about 40 minutes in my case), then my phone rang and I was talking to a real live human at the IRS. The agent looked at my previous returns and explained that my wife and I were both using the "Married" withholding rate on our old W-4s, which assumes a single-income household. With two similar incomes, we needed to either use "Married but withhold at higher Single rate" on the old forms or check the "Two Jobs" box on the new W-4. Saved me from another year of surprise tax bills. Still can't believe it worked!

Have you and your spouse considered filing as "married filing separately" instead of jointly? Sometimes that can be more beneficial depending on your specific situation.

Do either of you have any additional income that isn't having taxes withheld? Like investments, freelance work, rental properties? Even small amounts can add up and throw off your withholding if taxes aren't being paid on them throughout the year.

This is such a common problem! The key issue is that the withholding tables assume you're the only earner in your household when you select "Married." When both spouses work and earn similar amounts, you end up in higher tax brackets than the withholding calculations expect. Here's what you need to do immediately: 1. **Update both W-4 forms** - The new 2020+ W-4 is completely different from the old allowances system. You both need to fill out fresh forms. 2. **Check the "Two Jobs" box** - In Step 2 of the new W-4, there's a checkbox for couples where both spouses work. This automatically adjusts your withholding upward. 3. **Only ONE spouse claims the kids** - Don't both claim your 3 children. The higher earner should claim them in Step 3, the other spouse leaves it blank. 4. **Consider extra withholding** - You can specify an additional dollar amount to be withheld each paycheck in Step 4(c). Based on owing $2,800, you might want each of you to have an extra $50-75 withheld per paycheck. The IRS also has a withholding calculator on their website that can help you figure out the exact amounts. Don't let this drag on another year - update those W-4s now and you should see the difference in your next paychecks!

This is exactly what happened to us! We were in the same boat - both claiming 0 on our old W-4s and still owing every year. The problem is that "married" withholding assumes only one spouse works, so when you both have jobs with similar incomes, you end up in higher tax brackets than expected. Here's what finally fixed it for us: We both filled out brand new W-4 forms and checked the "Two Jobs" box in Step 2. That single checkbox made a huge difference! We also made sure only one of us claimed our kids (I claimed all three since my salary is slightly higher), and the other spouse left Step 3 blank. Since you owed $2,800 this year, you might also want to add some extra withholding in Step 4(c) just to be safe. We added $40 per paycheck each after our first year with the new forms, and now we get a small refund instead of owing. Don't wait - update those W-4s right away! Your HR departments should have the current forms, and you'll see the increased withholding in your next paychecks.