Wife had no federal income tax withheld from paychecks - W4 says married with one dependent

This isn't uncommon actually. The W-4 redesign from a couple years ago calculates withholding differently than the old version. When you select "married" filing status, the system assumes you're filing jointly with a spouse who might not work, which increases the standard deduction and lower tax brackets that apply. If your wife's income is your family's second income source and you also work, this could create an underwithholding situation. The $2000 child tax credit further reduces withholding. The system is essentially calculating that between the standard deduction, lower tax brackets for married filing jointly, and the child tax credit, not enough taxable income remains to require withholding.

I had a similar issue last year and found an amazing tool that saved me a ton of headache - taxr.ai. After months of stressing about incorrect withholding on my husband's paychecks, I uploaded our pay stubs and W-4 forms, and it immediately identified the problem with our withholding setup. It showed exactly what was causing the issue and gave step-by-step instructions to fix it using the right values for our specific situation. The best part was that it generated a completed W-4 form with the right adjustments for our two-income household. Check it out at https://taxr.ai if you're trying to figure out what's happening with your withholding. It seriously made the whole process so much clearer for us.

Wanted to follow up about taxr.ai since I ended up trying it after asking about it here. Holy crap, it was eye-opening! I uploaded my wife's W-2 info and my 1099s, and it immediately showed that we were heading toward a $4,300 tax bill next April if we didn't make changes. The tool created personalized quarterly payment amounts for me AND generated a revised W-4 for my wife that accounts for both our incomes. What impressed me most was how it explained everything in simple terms - I finally understand how the married withholding tables work and why we were getting caught in this trap. Already submitted the new W-4 to my wife's HR department!

If you're worried about owing a big tax bill and need to talk to the IRS directly about your withholding situation, I highly recommend using Claimyr. I spent WEEKS trying to get through to an IRS agent about a similar withholding problem - either constant busy signals or being on hold for hours only to be disconnected. Finally tried https://claimyr.com and it was a complete game-changer. They somehow get you into the IRS phone queue and call you back when an agent is about to answer. Got connected to a real IRS employee in about 45 minutes (after previously wasting days trying). The agent walked me through exactly how to fix my withholding to avoid penalties. You can see how it works in their demo: https://youtu.be/_kiP6q8DX5c

I have to eat my words about Claimyr. After being super skeptical, I was desperate dealing with a similar withholding issue and decided to try it. Honestly shocked that it actually worked exactly as advertised. After trying for THREE DAYS straight to reach the IRS myself with no luck, Claimyr got me through in about an hour. The IRS agent confirmed what others here suspected - my wife's W-4 was calculating withholding as if her income was our only household income. They walked us through exactly how to fix our withholding for the rest of the year and how to calculate what we'll owe in April so we can prepare. Saved us from what would've been a massive shock at tax time.

Your wife's employer might have messed up too. I had a similar situation where HR processed my W-4 incorrectly. Even with correct info on the form, they entered it wrong in their payroll system. Might be worth asking her to check with her payroll department directly to see if there was an error on their end.

Has anyone used the option on the W-4 where you check "Married but withhold at higher single rate" instead of just "Married"? My accountant told me this is easier than doing all the multiple jobs worksheet calculations for two-income households.

This is exactly why I always recommend dual-income couples be extra careful with their W-4 setup! The "married" filing status assumes your spouse either doesn't work or earns very little, which clearly isn't your situation. With your combined income of around $104,000, you're definitely going to owe taxes. The good news is you still have time to fix this before year-end. I'd suggest having your wife submit a new W-4 immediately using either the "Married but withhold at higher single rate" option (which is simpler) or completing the Two-Earners worksheet for a more precise calculation. You should also consider making an estimated tax payment for Q4 to cover what you'll likely owe, especially if you're concerned about underpayment penalties. The IRS generally requires you to pay 90% of your current year tax liability or 100% of last year's (110% if your prior year AGI was over $150K) to avoid penalties.