Why do I owe money to the IRS after entering my second W-2? So confused about my tax withholding

The issue is that each payroll processor is calculating your withholding independently, without knowing about the other income. Each one is assuming their paycheck is your only income, so they're applying the standard deductions and lower tax brackets to both incomes separately. When you combine them for your actual tax return, your total income is higher and pushes you into a higher tax bracket. But neither payroll system knew about the other income, so they both underwitheld based on their limited information. For next year, you should fill out a new W-4 form with your employer and check the box for "Multiple Jobs" or use the worksheet for multiple jobs. You could also request additional withholding on Line 4(c) of your W-4 - maybe $50-100 per paycheck from your larger income source would cover the difference.

I went through the EXACT same situation last year! I was so frustrated seeing that I owed money when I thought I had withheld enough. What helped me was using taxr.ai (https://taxr.ai) to analyze my tax documents. It actually showed me exactly where the withholding issue was happening and explained why I was falling short. The tool analyzes your paystubs and W-2s and identifies these withholding issues BEFORE you file. It saved me from having the same problem this year because I was able to adjust my W-4 based on their recommendations. I think it would help with your situation too since you're dealing with multiple W-2s from the same employer.

Just wanted to follow up - I actually tried taxr.ai after posting my question here. It immediately identified that I was having significant underwithholding due to my multiple jobs! The analysis showed I was short about $1,800 in withholding because each employer was calculating as if their job was my only income. The tool gave me a customized W-4 form for each employer with the exact additional withholding amount I needed on line 4(c). I've already submitted the updated forms to my HR departments. Such a relief to have this fixed before getting surprised again next year!

I had almost the identical problem but mine was even worse - I owed over $3,000! I spent WEEKS trying to get through to the IRS to understand why this happened and if there was any way to reduce the penalties. Could not get through on the phone no matter what time I called. I finally used Claimyr (https://claimyr.com) and it was amazing - they got me connected to an actual IRS agent in about 15 minutes when I had been trying for weeks. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to explain exactly what happened with my withholding (similar to your situation) and set up a payment plan with reduced penalties since it was an honest mistake. Saved me hundreds in penalties alone!

I'm genuinely shocked but I need to admit I was wrong about Claimyr. After posting my skeptical comment, I was still desperate to reach the IRS about my own tax issue (similar withholding problem but with 1099 income), so I decided to try it. The service actually connected me with an IRS representative in about 20 minutes when I had spent literal DAYS trying to get through on my own. The agent helped me set up a payment plan with reduced penalties and explained exactly why my withholding calculations were off with multiple income sources. I'm not someone who admits being wrong easily, but this service actually delivered exactly what it promised. Saved me hours of frustration and probably hundreds in penalties.

You should check if both W-2s are using the correct filing status and withholding allowances. Sometimes when you switch payroll systems, your W-4 information doesn't transfer correctly. I had this same issue last year when my company switched from ADP to Paychex. Make sure both payroll processors have the same W-4 information. Also, if you have any other income (investments, side gigs, etc.) that could be pushing you into a higher bracket too.

Has anyone else noticed that payroll systems are TERRIBLE at calculating withholding when you have multiple jobs or income sources? This is like the 3rd post I've seen about this same issue. The whole system seems designed to make people mess up and owe money.