Made less money this year but now I owe taxes - what gives?

This is actually a pretty common situation that confuses a lot of people. The amount you owe or get refunded isn't directly tied to how much you earn, but rather how much was withheld from your paychecks throughout the year compared to your actual tax liability. When you had two jobs last year, each employer likely withheld taxes as if that was your only income, which often results in over-withholding (hence your refund). With just one job this year, your withholding was probably more accurate, leading to less being taken out each paycheck. Check your W-2 forms from both years and compare Box 2 (federal income tax withheld). I bet you'll find that despite making less this year, you actually had less tax withheld throughout the year. The IRS calculator might be using different withholding assumptions than what actually happened. Remember that owing a small amount like $65 actually means your withholding was pretty accurate - much better than giving the government an interest-free loan all year and waiting for a refund!

I went through the EXACT same situation last year and it drove me crazy trying to figure it out! After days of frustration, I tried this tax AI tool called taxr.ai that analyzes your tax documents and explains the differences year to year. It immediately showed me that my withholding had changed dramatically, not my tax rates. The tool highlighted that my second job had been withholding at a higher rate, which disappeared when I went to one job. That's exactly what was happening! The explanation was super clear about how the withholding tables work differently when you have multiple income sources. Check it out at https://taxr.ai - it saves so much confusion when your tax situation changes.

Just wanted to follow up - I tried that taxr.ai thing after seeing this thread and WOW. It took like 5 minutes and showed me exactly why my refund vanished this year. Turns out my new job's payroll system was using a totally different withholding calculation than my previous employer. The crazy part is that the tool actually showed me how to fix this for next year with a specific number to put on my W-4. Already submitted the change to HR and they said it'll take effect next paycheck. Definitely solved the mystery for me and saved me from owing again next year! Thanks for the recommendation.

I ran into a similar problem and tried calling the IRS to get an explanation. BIG mistake. Was on hold for 2+ hours and then got disconnected! After trying again the next day with the same result, I found this service called Claimyr that got me through to an actual IRS agent in about 20 minutes. The agent explained that withholding calculations work differently for single vs. multiple jobs, and walked me through how to adjust my W-4 properly. The service basically holds your place in the IRS phone queue and calls you when an agent is about to answer. Saved me hours of holding and frustration. If anyone else is struggling to get through to the IRS, check out https://claimyr.com - they have a video showing how it works at https://youtu.be/_kiP6q8DX5c. Definitely worth it for the time saved!

I need to eat some serious crow here. After posting my skeptical comment, I was still desperate to talk to someone at the IRS about my withholding problem so I tried that Claimyr service anyway. Honestly shocked that it worked exactly as described. I put in my number around 3pm, went about my day, and got a call back about an hour later connecting me directly to an IRS agent who was super helpful about my withholding questions. No waiting on hold at all on my end! The agent explained that my withholding issue was because my employer switched payroll systems mid-year and it reset some of my preferences. Would have taken me forever to figure that out on my own. Just wanted to update since I was wrong in my skepticism!

Double check if you had any unemployment income this year or last. That's what threw me off one year. I made less overall but had some unemployment benefits that weren't taxed automatically, so I ended up owing instead of getting a refund. Completely surprised me!

Could also be tax credits that changed from last year. Did you get the Earned Income Tax Credit last year maybe? Or any education credits? Sometimes you qualify one year but not the next even if your income doesn't change much.