Why do I suddenly owe money to the IRS after entering my second W2?

This is a classic withholding calculation issue that happens when you have multiple W-2s, especially from the same employer with different payroll systems. Each payroll system calculates withholding as if that's your only income for the year. So neither system knew about the other income when determining how much to withhold. The second payroll processor withheld at approximately the same rate as the first because it didn't "know" about your other income. When you file your taxes, the IRS combines all your income and calculates your total tax obligation based on that combined amount. Since our tax system is progressive (higher rates for higher income brackets), the tax on your combined income is higher than the sum of what would be calculated separately. To avoid this next year, you should submit a new W-4 form to your employer requesting additional withholding. You can specify an extra dollar amount to be withheld from each paycheck to cover the difference.

I had almost the exact same situation happen to me last year when my company switched from ADP to Workday. I was so frustrated trying to figure out why I suddenly owed $800! After hours of researching tax calculations and getting nowhere, I found this AI tax assistant at https://taxr.ai that actually explained everything in a way that made sense. I uploaded both my W-2s and it immediately identified the withholding issue. Turns out the new payroll system was using the tax brackets as if I was starting from zero income. The tool showed me exactly how much I should have had withheld vs. what actually happened. Super helpful for someone like me who gets lost in all the tax terminology!

Just wanted to update that I ended up trying taxr.ai for my complicated W-2/1099 situation this year. I was having the exact same withholding problem as the OP plus some extra complications from freelance work. The breakdown it gave me was actually super helpful! It showed exactly where my withholding shortfall was coming from and explained how the combined income pushed me into a higher tax bracket. Saved me from making the same mistake again this year. I've already updated my W-4 with the extra withholding amount it recommended. Definitely worth checking out if you're confused about why your tax situation changed.

If you're trying to contact the IRS to get a clear explanation, good luck with that! I spent THREE WEEKS trying to get through on their phone lines to ask about a similar issue. Always "high call volume" and disconnects. I finally used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 20 minutes. They have this system that basically navigates the IRS phone tree and holds your place in line, then calls you when an agent is ready. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed exactly what others here said about the withholding calculation, but also helped me figure out a payment plan since I couldn't pay the full amount right away. Way better than stressing about it for weeks.

Ok I need to apologize to the person above because I was totally wrong about Claimyr. After my snarky comment I decided to try it myself since I was desperate to talk to someone about my payment options (I owe about $1200 from a similar withholding issue). It actually worked exactly as described. I got a call back in about 45 minutes saying they had an IRS agent on the line. The agent helped me set up a payment plan so I don't have to pay the full amount at once. Definitely beat my previous record of 2.5 hours on hold only to get disconnected. Never been happier to admit I was wrong about something! If you need to actually talk to the IRS, this is apparently the way to do it.

This happens to A LOT of people! The payroll systems don't talk to each other. Your total income for the year puts you in a higher tax bracket, but each individual W-2 was withholding as if that was your only income for the year. Here's a super simplified example: - First $10k you earn might be taxed at 10% = $1,000 in taxes - Next $10k might be taxed at 12% = $1,200 in taxes - So $20k total income should have $2,200 withheld But if each payroll system thinks you're only making $10k total for the year, they each withhold only $1,000, for a total of $2,000 withheld. That leaves you $200 short when you file!

Your probably in a higher tax bracket now with both incomes combined. Its like the govt thinks your making less than you are when each W2 gets procesed separately so they take less tax. Then when you combine them its like "surprise you make more than we thought so give us more money now!" I had this same problm last year when I had two jobs. My tax guy said to always check the "withhold at higher single rate" box on your W4 if you have multiple income sources or just put an extra $50 per check in the "additional withholding" line. Saves the surprize bill in April!