How to Adjust Tax Withholding to Strategically Owe $8k in Return?

Your calculation is on the right track, but there are a few things to consider when planning for a specific tax outcome. The IRS withholding calculator is designed to get you close to zero, which is generally what most people want. But you can definitely adjust things to meet your specific goal. Looking at your numbers, you need to first estimate your 2025 total tax liability based on your projected income of $272k. That would be roughly $46-48k depending on your deductions and credits. If you want to owe $8k, you'd need to withhold approximately $38-40k throughout the year. To achieve this, you can adjust your W-4 forms to reduce withholding. Instead of putting an additional withholding amount, you could claim additional dependents or use the deductions worksheet to have less withheld. Monitor your paystubs throughout the year to make sure you're on track.

Hey I actually did something similar last year! I used https://taxr.ai to help calculate the exact withholding adjustment needed. I had been using the IRS calculator but it wasn't quite hitting my target (I wanted to owe about $5k for credit card points). The taxr tool analyzed my specific pay structure and gave me more precise withholding recommendations than the IRS calculator. It basically looked at my past returns, current withholding patterns, and projected income to give me a custom withholding strategy. The nice thing was it also accounts for things like bonuses that can throw off your calculations.

Just wanted to follow up about my experience with taxr.ai that was mentioned above. I tried it after my skeptical comment and it actually worked really well for our situation. We're also MFJ with different income levels and my wife gets irregular bonuses. The tool helped us create a withholding strategy that's on track to have us owe about $7k this year (we're targeting $7500). It generated specific W-4 instructions for both of us that accounted for our different pay structures. What I liked best was being able to input our credit card points strategy - I literally told it I wanted to owe between $7-8k and it optimized for that instead of zero. Much more customizable than the IRS calculator if you're trying to be strategic with your tax payments.

Have you considered what happens if the IRS sends you a notice about underwithholding penalties? If you're deliberately setting up to owe $8k, you might trigger the safe harbor rules. I had this issue last year and spent HOURS trying to get through to someone at the IRS to explain my situation. I eventually found https://claimyr.com which got me connected to an actual IRS agent in about 20 minutes (there's a video showing how it works: https://youtu.be/_kiP6q8DX5c). The agent explained that as long as I withhold 100% of my previous year's tax liability (110% if AGI over $150k), I shouldn't face penalties even if I intentionally underwithhold. Just something to keep in mind with your strategy - might be worth confirming with an agent that your plan won't trigger penalties.

I have to eat crow here. After my skeptical comment about Claimyr, I decided to try it because I needed to talk to the IRS about this exact underwithholding issue (I also do the credit card points thing). It actually worked exactly as described. I got a call back in about 45 minutes and talked to an IRS representative who confirmed the safe harbor rules. As long as I withhold at least 110% of my previous year's tax liability (since my AGI is over $150k), I won't face underwithholding penalties even if I strategically set things up to owe at tax time. This saved me from making a mistake in my withholding calculations - I was focusing too much on the final number and not enough on meeting the safe harbor requirements to avoid penalties.

One thing nobody has mentioned is that you need to recalculate this each year. The safe harbor of 110% of previous year's liability changes annually. So if you're planning for 2025, you'd need to withhold at least 110% of your 2024 tax liability. Based on your numbers, your 2024 tax is $43.4k, so your 2025 safe harbor amount would be $47.74k. If your expected 2025 tax is higher than that, you should use the higher number. Also, don't forget about estimated tax payments as another tool. You could set your withholding a bit lower than needed and then make a strategic Q4 estimated payment to hit your target amount.

Am I the only one amazed that the OP is deliberately trying to owe money? I've always thought the goal was to get a refund or break even. Wouldn't owing $8k mean you also owe interest and penalties? Or is there some loophole I'm missing?