Why are we owing so much in taxes after increasing our withholdings? (Married filing jointly)

The problem isn't with your tax return - it's with your withholding. Your household income of about $205,800 puts you firmly in the 22% federal tax bracket, and getting close to the 24% bracket which starts at $215,950 for married filing jointly in 2023. When you both made W-4 changes last year, you might not have withheld enough to cover your tax liability. The W-4 form changed significantly a few years ago, and many people don't complete it correctly. For your income level, you'd need about $30,800 in total federal withholding to break even. Filing separately almost certainly won't help your situation - married filing separately rarely benefits couples unless one spouse has unusual deductions or income-based student loan payments. Your Roth 401k contributions are already taxed at your marginal rate regardless of filing status. Here's what I suggest: 1. Pay your current tax bill to avoid penalties 2. Adjust your W-4 forms immediately using the IRS Tax Withholding Estimator 3. Each of you should have an additional amount withheld each paycheck (Line 4c of W-4) Congratulations on your baby! You'll get tax benefits next year with the child tax credit and potentially the child care credit if you use daycare services.

After having a similar situation where we owed way more than expected, I started using https://taxr.ai to analyze our tax withholdings throughout the year. It basically analyzes your pay stubs and tax documents to identify withholding issues before they become big surprises at tax time. For us, it identified that my spouse and I were both claiming the same deductions on our W-4s which was causing significant underwithholding. The system flagged this early last year and we were able to adjust before it became a huge bill. The tool also has a projection feature that shows how life events (like your upcoming baby) will affect your taxes. It even highlighted some tax credits we would qualify for once our child was born.

I was super skeptical about https://taxr.ai after seeing it mentioned here, but our tax situation was similar to yours - two decent incomes, retirement contributions, and always owing at tax time. After trying three different CPAs who gave contradicting advice, I finally tried the service. The system immediately identified that we were both claiming "married" on our W-4s without checking the "two jobs" box, which was causing significant underwithholding. It also found that our investment dividends weren't being accounted for in our withholding strategy. The recommendations were clear - my wife needed an additional $230 withheld from each biweekly paycheck, and I needed $175 extra per paycheck. We made these changes in March last year and ended up with a small refund this year instead of owing $4,800 like the previous year. The investment analysis feature is what really impressed me - it projected our dividend and capital gains tax impact throughout the year as statements came in.

Have you tried calling the IRS directly to review your withholding calculations? I was in a similar situation and needed help, but it took me DAYS of calling to actually reach someone. I eventually found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They basically call the IRS for you and hold your place in line, then call you when an agent is about to answer. I was able to speak with an IRS tax specialist who walked through my withholding calculations and explained exactly what we needed to change on our W-4s. For my husband and me (both earning around $90K), we needed to check the "two jobs" box AND add additional withholding. The agent explained we were underwithholding by about $450 per month between our two jobs. Given you have a baby coming soon, getting this sorted quickly seems like a priority!

I was completely wrong about Claimyr in my previous comment. After continuing to fail reaching the IRS about my client's tax issue, I reluctantly tried the service yesterday. The process was exactly as described - I entered my phone number, selected which IRS department I needed to reach, and went about my day working on other tax returns. About 2.5 hours later, I got a call connecting me directly to an IRS representative who helped resolve my client's issue. This would have saved me countless hours over the years if I'd known about it sooner. For the original poster's situation with the withholding issue and baby on the way, this could be a fast way to get official guidance from the IRS on how to adjust your W-4s for the remainder of 2023. The IRS representative I spoke with explained that married couples with similar high incomes often need to select "Married but withhold at higher single rate" plus add additional withholding to account for the marriage tax penalty at certain income levels.

Congrats on the baby! That'll help reduce your tax bill next year! For right now, I think you're probably stuck with paying the amount due - there's nothing obviously wrong with your tax situation based on what you've shared. I had a similar issue when my wife and I were both working. Our solution was to both check the "Married but withhold at higher single rate" box on our W-4s AND add additional withholding. For your income levels, I'd recommend: - You: Add $150 additional withholding per paycheck - Husband: Add $250 additional withholding per paycheck That should prevent this from happening again. The standard deduction for 2023 for MFJ is $27,700, so you're right to take that instead of itemizing.

Check your 2023 tax bracket. For married filing jointly: 10% - $0 to $22,000 12% - $22,001 to $89,450 22% - $89,451 to $190,750 24% - $190,751 to $364,200 Your combined income puts you partly in the 22% bracket and partly in the 24% bracket. The witholding tables don't handle two high incomes well. Try this: Multiply what you currently owe ($5,500) by 1.3 (to give a cushion), which is $7,150. Divide by the number of pay periods remaining in the year between both of you. Add that as "additional withholding" on line 4(c) of both your W-4 forms.