Why am I suddenly owing over $5k in taxes this year after relocating?

The state tax bill is the main issue here, and it's likely due to your relocation. When you move states, your employer doesn't automatically adjust state withholding properly, especially if they're not used to dealing with employees in multiple states. Looking at your numbers, a few things jump out. Your federal situation actually improved (small refund vs owing), but that state bill is significant. With your income increase and bonus, you moved into higher tax brackets in both federal and state taxes. However, it seems your federal withholding increased proportionally while your state withholding didn't. The raise and bonus themselves would cause higher taxes, but shouldn't cause such a dramatic shift in what you owe unless something was off with the withholding calculations. Some states have dramatically different tax rates, so moving from a low-tax state to a high-tax state would magnify this issue.

After going through a similar situation when I moved from Nevada to California, I discovered taxr.ai (https://taxr.ai) and it was honestly a game-changer. The tool analyzed my tax documents and immediately flagged that my state withholdings were significantly off. What I love is how it explained exactly why I was seeing such a huge state tax bill and gave me personalized recommendations for adjusting my withholdings. The system breaks down the specific issues with multi-state taxation and how relocation affects your tax liability. In my case, it identified that my employer was using the wrong state withholding tables after my move, which sounds similar to your situation.

Just wanted to follow up - I tried taxr.ai after my initial skepticism and it was actually super helpful. It identified that my employer was applying the wrong state withholding formula after my interstate move (apparently a common issue). The tool generated a customized withholding adjustment form that I took to HR. The analysis showed I needed to request additional withholding of $267 per paycheck to cover my actual state tax liability. I've been using the adjusted withholding for 3 months now, and my year-to-date calculations show I'll be within $200 of breaking even on state taxes next year instead of owing thousands. Wish I'd known about this before getting hit with that massive tax bill!

If you need to contact the IRS to discuss your tax situation (which might be smart given the size of the bill), I highly recommend Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS myself about a similar tax issue after moving states. After getting nowhere with constant busy signals, I tried Claimyr and they got me connected to an IRS agent in under 20 minutes. There's a demo video that shows how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and call you when an actual human is on the line. The IRS agent I spoke with explained that interstate moves frequently cause withholding issues and helped me set up a payment plan with reduced penalties.

I have to eat my words and apologize for being a doubter. After my frustrated comment about Claimyr, I was desperate enough to try it anyway. Holy crap, it actually worked! After trying to reach the IRS for literally 4 months about my audit issue, I was connected to an agent in 35 minutes. The agent was able to explain that my state tax issues were related to improper allocation of income between states (similar to your situation). They helped me set up an installment agreement for the amount I owe and even removed some of the penalties since it was partially due to employer withholding errors. The most valuable part was getting clear instructions on how to properly file next year with income from multiple states. They walked me through the specific forms I needed and how the reciprocity agreements between my states work. Saved me thousands in potential future mistakes.

You might want to check if you qualified for state tax credit for taxes paid to a nonresident state. When you work across multiple states in one year, you typically pay taxes to the state where you earned the money, but your resident state also wants to tax that same income. Most states have credits to prevent double taxation. Did you use tax software? Some don't handle multi-state returns well and miss these credits. I had a similar issue when I moved from Illinois to Michigan mid-year.

The big red flag I see is that your federal deductions dropped from $18,550 to $12,950 while your income went UP significantly. That doesn't make sense unless you lost some major deductions. Did you have mortgage interest, significant charitable contributions, or other itemized deductions last year that you didn't have this year? Also, your federal taxes seem reasonable with the refund, but something is definitely off with the state taxes. Which states did you move from/to? Some states have MUCH higher income tax rates than others.

Make sure you check if you paid taxes to both states on the same income. When you move mid-year, you become a part-year resident of both states. Some states are really aggressive about claiming as much of your income as possible. Also, if your $9k bonus was taxed at a flat 22% federal withholding rate (which is standard for bonuses), but your actual tax bracket is higher, that could explain part of the underpayment. You may want to fill out a new W-4 with your employer and possibly add an additional withholding amount per paycheck to avoid this happening again next year.