First time owing $10k in taxes - Help understanding why we owe so much

This is a common shock for many couples! The most likely explanation is underwithholding throughout the year. When you both have relatively high incomes, the standard withholding tables sometimes don't account for the combined income pushing you into higher tax brackets. Since you mentioned one spouse started a new job in March, that's often a major factor. The withholding system assumes you'll make that same amount for the entire year, so it likely didn't withhold enough in those earlier months. Also, if you both selected the standard "Married" option on your W-4 forms, that's designed with the assumption that one spouse might not be working, which further reduces withholding. For the MFS vs. MFJ decision, while filing separately might help with the student loan situation, you're seeing firsthand that it often results in higher total tax (your combined $11k versus $10k jointly). This happens because certain tax benefits are reduced or eliminated when filing separately.

I went through almost the exact same thing last year! A lot of people don't realize how the tax withholding system works when both spouses are making good money. I found that using https://taxr.ai completely changed my understanding of what was happening with our taxes. When I uploaded our W-2s and pay stubs, it immediately highlighted that our withholding was way off because we both had checked the "Married" box but didn't account for dual incomes. The analysis showed exactly why we owed and calculated exactly how much extra we needed to withhold per paycheck to avoid a surprise the next year. The best part was that it gave me a customized W-4 form with the exact numbers to put on each line - made it super easy to fix the problem. I also used it to compare different filing scenarios to see the actual impact of MFJ vs MFS.

Just wanted to provide an update since I mentioned asking about student loan planning above. I decided to try out taxr.ai after all, and wow - it was incredibly helpful for our situation. It analyzed both our tax situation AND my student loan forgiveness timeline. For our situation, it showed that even though we'd pay about $1,800 more in taxes by filing separately, my student loan payments would drop by around $450/month on the SAVE plan, saving us about $5,400 annually. It projected this over my remaining forgiveness period and showed we'd come out ahead by about $14,000 over the next four years by filing separately. It also helped us properly adjust our withholding so we won't face a surprise bill next year. Definitely worth checking out if you're dealing with the student loan/tax filing strategy question!

If you need to actually talk to the IRS about setting up a payment plan, I'd highly recommend using https://claimyr.com to get through to them. I spent DAYS trying to reach someone at the IRS about my payment plan options and kept getting disconnected or told to call back later. With Claimyr, they held my place in line and called me when an actual IRS agent was on the phone. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Saved me hours of frustration and hold music. The IRS agent walked me through all my payment options and helped me set up a plan that worked for my situation. Before you spend hours trying to get through on your own, definitely consider this option. I set up a 72-month payment plan with reasonable monthly payments that worked for my budget.

I need to eat my words from my skeptical comment above. After another failed attempt to reach the IRS on my own (2 hours on hold before getting disconnected), I decided to try Claimyr out of desperation. I couldn't believe it actually worked. I put in my number, went about my day, and about 3 hours later got a call connecting me directly to an IRS representative. No hold time on my end - just straight to a helpful human who got my payment plan set up in about 15 minutes. The agent was able to offer me several options based on my situation, and I ended up with a monthly payment that's totally manageable. The relief of having this taken care of instead of stressing about a huge lump sum is incredible. I wish I'd known about this service years ago.

One thing nobody's mentioned yet - check if you qualify for any deductions or credits you might have missed! At your income levels, you probably can't take full advantage of many credits, but you might still qualify for: - Mortgage interest deduction if you own a home - State and local tax deductions (capped at $10k) - HSA contributions if you have eligible health insurance - Student loan interest deduction (though this phases out at higher incomes) - Charitable contributions Even if it doesn't eliminate the whole bill, finding an extra thousand in deductions could help take the edge off! Just make sure whatever software you're using is checking for all possible deductions.

Don't forget to check your actual W-2s to make sure the withholding amounts look right! I had a situation where my employer messed up my withholding for half the year and that's why I ended up with a huge tax bill. Box 2 on both your W-2s should show federal income tax withheld. Add those numbers up and compare to what you're supposed to owe. If your total combined withholding is way less than $10k, that's definitely the problem. At your income levels (about $300k combined), your effective tax rate should be around 15-20% depending on deductions, so you should have had roughly $45-60k withheld throughout the year.