To understand what has changed, it is essential to perform a line-by-line comparison of your 1040 forms from the 2024 and 2025 tax years. It is possible that an increase in income shifted you into a higher tax bracket; for example, moving from 12% to 22% or from 24% to 32% can significantly increase your balance due or decrease your refund.
If a higher tax bracket/underwithholing is the cause, you should consider updating your Form W-4 to request that an additional dollar amount or percentage be withheld from each paycheck. Additionally, holding multiple jobs can impact your withholding, as individual employers may not be aware of your total income and will withhold taxes based solely on the salary they pay and your declared filing status.
While there is no strict requirement for when to update your W-4, reviewing and updating it once a year is a practical way to ensure your information remains current.
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