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We have to pay quite a bit this year

Wow! It's so weird to me to see so many people owing!? Can somebody explain to me what y'all mean by changing the withholding?

Eta: DH and I claim 0 and none, paid roughly $35,000 in federal withholding, had a child and are getting back around $8k with no deductions

@gotkimchi: thank you! I see now more over the year vs. a lump sum. I prefer the lump sum, we're very good at saving money all year, so we consider our tax money fun money. We generally use it for something we've been wanting all year.

American taxes confuse me.

I'm getting nothing back since I paid zilch taxes (I was on Mat leave 2x & in school).
SO is getting just under 4K.

We are going to owe. It's a good thing though, since DH made more money than we expected so our withholding wasn't enough. Hope it isn't too huge though.

We owe 10k

I like getting a tax refund, I don't look at it as lending the govt money, but as enforced savings. It's not like I'm a millionaire with fancy high return investments, if I got <$100 more per paycheck, it would disappear very easily. So I keep my withholdings at zero to ensure a refund every year. We use the refund for IRAs, savings for LO, and sometimes small house things.

I definitely don't withhold enough so that I get a large refund. The forced savings every month does me a lot better than losing in my IRA right now. I have a shopping problem so feeling like I'm cutting it close month to month works for me vs. the pretend dividends I'm not earning investing the money I don't see I might have to change it up this year b/c the second kid coming any day now might push our month to month a little too tight! We'll see!

@reverie: We've been owing big the past few years before I caught that instruction last year.

Not sure what to expect this year between that change and 5 months of maternity leave.

@Jackiedavis87: that's how we are. We already have our savings/retirement/investments that are automatically deducted. So the extra taxes are, as you said, gov't enforced extra savings.

Plus, on all those debt-free forums, they make a big point about how the US gov't makes money off the interest of all of our tax money and that's why we shouldn't let the government hold it. And then the argument is that people tend to blow it all at once, which props up the shopping economy.

But hey, if everyone stopped, our economy would probably implode, so I'm happy to do my part.

@Anagram: lol so true, I used to work in retail and mid-feb to march was the busiest time of the year, even busier than Christmas.

@reverie: we do list as married. Would withholding extra accomplish the same thing or would it be better to change to single?

We got $4400 back, which is about normal. We always file the same way and withhold at 0 and at the higher single rate. We count on it to pay property taxes, so I keep it that way or my husband will spend it.

@Mrs. Carrot: I would recommend updating your W-4 to "married but withhold at higher single rate". Basically, each of your employers is withholding tax assuming you are in one tax bracket, but likely with the two incomes combined, you're in another tax bracket all together--thus why you owe. Same story for us, plus the fact we pay very little mortgage interest and property taxes.

ETA: whoops, just now reading other comments recommending the same. You can also put on there to withhold x amount extra each pay period, that is what I did. Since I expect to be in a similar situation next ywar, I took the amount I owed divided by the number of pay periods and requested that additional amount be withheld. Theoretically, we should almost breakeven next year.

We just did our taxes, and we are getting 2100 back. We have to pay one bill, DH is getting a new desk chair, and the rest is going into savings.