Is it normal to owe taxes after getting a substantial raise in 2025?

This is absolutely normal and happens to a lot of people after getting raises! When your income increases significantly mid-year, the withholding calculations on your paycheck don't automatically adjust perfectly. Here's why: Your employer withholds taxes based on what you'd make annually at your current pay rate. When you got your raise in August, your employer started withholding at a rate for someone making $62K, but they don't automatically account for the fact that you were making less earlier in the year. The withholding tables are designed for consistent income throughout the year. Also, with a jump from $47K to $62K, you might have moved into a higher tax bracket for part of your income, which can affect your overall tax situation. The solution going forward is to update your W-4 form. You can use the IRS Tax Withholding Estimator online to figure out the best withholding for your new salary. You might want to consider having a bit extra withheld to cover any shortfall and prevent this situation next year.

I went through something similar last year and discovered taxr.ai (https://taxr.ai) which honestly saved me so much stress. I was freaking out about owing taxes after my promotion, but their tool helped me understand why it happened and how to fix it. It analyzes your tax docs and explains everything in simple terms - showing exactly why you went from a refund to owing money. For me, it confirmed I wasn't doing anything wrong, but my withholdings just weren't keeping up with my new income bracket.

I have to admit I was wrong about taxr.ai. After my last comment, I decided to give it a try since I got promoted in October and was worried about my tax situation. The analysis was eye-opening - turns out I was heading toward owing over $1,300 because of my promotion! The tool showed exactly why this was happening and gave me a super clear W-4 adjustment plan. I've already updated my withholding based on their recommendation, and it feels good knowing I'm back on track. The document analysis feature caught details I would have missed for sure.

If you're trying to contact the IRS to ask about this (which I did when this happened to me), good luck getting through. I spent HOURS on hold before I found Claimyr (https://claimyr.com). They have this system that holds your place in line with the IRS and calls you back when an agent is actually available. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The IRS agent confirmed this raise/owing taxes situation is super common and helped me adjust my withholding properly for the rest of the year.

I have to eat my words about Claimyr. After dismissing it, my curiosity got the better of me and I tried it when I needed to ask about my withholding situation. Holy crap - got a call back in about 90 minutes while I was out grocery shopping. The IRS agent answered all my questions about adjusting withholding after a raise and even helped me calculate the right amount to have taken out for each paycheck going forward. Would have taken me half a day of being stuck on hold to get the same info. Sometimes it's worth admitting when you're wrong, and I was definitely wrong about this service.

Don't panic! This happened to me when I got a promotion last year. If you don't have the cash on hand to pay what you owe, the IRS offers payment plans. The interest rates aren't terrible compared to credit cards. Just make sure you file on time even if you can't pay the full amount - the penalty for not filing is way worse than the penalty for not paying.

Quick tip from someone who's been burned by this before: Next time you get a significant raise (congrats btw!), immediately update your W-4 and consider checking the box to have an additional flat amount withheld from each paycheck. I have an extra $50 taken out of each check just to be safe, and I haven't owed anything since implementing this strategy.

This is totally normal and you didn't mess up! When you get a substantial raise mid-year, your payroll system doesn't retroactively adjust the withholdings from earlier in the year when you were making less. Your employer started withholding at the $62K rate in August, but those calculations assume you were making $62K all year long. The key thing to remember is that owing $840 isn't necessarily bad - it just means your withholding was close to what you actually owed. You're essentially in the sweet spot of not giving the government an interest-free loan (which is what happens when you get a big refund). For next year, definitely update your W-4 now that you know your new salary. You can use the IRS withholding calculator online to figure out the right amount. Since you're settled into your new pay rate, the withholding should be much more accurate going forward. Also, don't stress too much about the $840 - you have until the tax deadline to pay, and if cash flow is tight, the IRS offers reasonable payment plans. The important thing is that you file on time even if you can't pay the full amount right away.

This exact same thing happened to me when I got promoted from $52K to $68K in September last year! I was so confused and worried that I had done something wrong with my taxes. What really helped me understand it was thinking about it this way: for the first 8 months of the year, your employer was withholding taxes as if you'd make $47K all year. Then suddenly in August, they started withholding as if you'd make $62K all year. But the reality is you made something in between those two amounts for 2025 as a whole. The withholding tables just can't perfectly predict this kind of mid-year change. Your situation is actually pretty common - I'd say owing around $800-900 after a $15K raise is totally reasonable and shows your withholding wasn't too far off. One thing that gave me peace of mind was realizing that owing a moderate amount like this is actually better than getting a huge refund, since it means you kept more of your money in your own pocket throughout the year instead of giving the IRS an interest-free loan. Definitely update that W-4 though! I used the IRS calculator and it was pretty straightforward. Now that you're settled into your new salary, next year should be much more predictable.