Get your taxes done using TurboTax

Terri Lynn · ‎May 28, 2025

Hello Kerime181!

Thank you for joining us today!

It's very common for married couples with two incomes, especially at your income level, to end up owing taxes. This often happens because the standard withholding calculations for two jobs or two earners don't fully account for how your combined income pushes you into higher tax brackets. The good news is that with a combined income of $240k, you have good opportunities to adjust.

Yes, the best route is for both of you to update your W-4s (and state withholding forms), but the key is to coordinate them using a specific tool.

Here's the most effective strategy to ensure you owe nothing (or very close to nothing) at tax time:

IRS Tax Withholding Estimator (For Federal)

This is by far the most crucial step for married couples with two jobs. It accounts for your combined income and allows you to set a precise target for your withholding.

Go to: https://www.irs.gov/individuals/tax-withholding-estimator
What you'll need:

Your most recent pay stubs for both your jobs.
Your most recent tax return (the one where you owed $14k). This helps the estimator understand your tax situation.
Information on any other income (like your LLC's profit, if any, or investment income).
Details on your current deductions (e.g., student loan interest paid, state and local taxes paid, any pre-tax contributions to 401(k), HSA).

How to use it for your goal:

Enter all your information accurately.
When the estimator asks about your desired outcome, choose "as close to zero as possible."
Crucial for two incomes: The estimator will specifically guide you on how to split the withholding. It might recommend checking the "Multiple Jobs" box in Step 2(c) on both W-4s, or it might suggest adding a specific "extra withholding" amount in Step 4(c) on one of your W-4s. Follow its recommendations precisely.

Update Your Federal Form W-4s

After using the IRS estimator, it will provide clear instructions on how to fill out a new Form W-4, Employee's Withholding Certificate, for each of your jobs.
Do NOT send these forms to the IRS.
Submit the updated W-4s to your respective employers' payroll or HR departments.

Adjust Your State Withholding (If Applicable)

Just like federal, your state has its own withholding form.

Find Your State Form: Search your state's Department of Revenue website for "Employee's Withholding Certificate" or "State W-4."
Coordinate: While few states have an estimator as robust as the IRS's, you can apply similar principles:

Consider claiming fewer allowances/exemptions on your state W-4s (e.g., 0 or 1 on each) to increase withholding.
Look for a line for "additional amount of tax to be withheld" per pay period. This is where you can add a fixed dollar amount to ensure enough state tax is withheld. You might need to estimate your state tax liability and divide it by the number of pay periods remaining in the year to figure out this amount.

Consider Strategies Beyond Withholding

Maximize Pre-Tax Retirement Contributions: With a $240k income, you're likely in a higher tax bracket. Contributing more to your 401(k)s (especially if your employers offer them) or traditional IRAs significantly reduces your taxable income. For example, if you both contribute the maximum to your 401(k)s, that's a substantial reduction to your gross income before taxes are even calculated.

Example: If you both contribute $23,000 (2024 limit) to your 401(k)s, that's a $46,000 reduction in taxable income right there.

Health Savings Account (HSA) Contributions: If you have a high-deductible health plan, contribute to an HSA. These contributions are tax-deductible.
Student Loan Interest Deduction: While you mentioned it "didn't do much," ensure you're claiming the maximum $2,500 deduction for student loan interest if you're eligible (it phases out at higher incomes, but some may still qualify).
Self-Employed Health Insurance Deduction: If you pay for your health insurance through your LLC, ensure you take this deduction on Schedule 1 (Form 1040).
Estimated Tax Payments for LLC: If your LLC is profitable and you don't take a salary from it, ensure you're making quarterly estimated tax payments for that income, both federal and state. Your $14k balance could be partly due to insufficient payments on your LLC income throughout the year.

Monitor and Re-evaluate

Check Pay Stubs: After you submit your new W-4s, check your first few paychecks to ensure the correct amounts are being withheld.
Re-run Estimator Mid-Year: If you get a raise, change jobs, have a significant change in your LLC's profitability, or any other major life event, re-run the IRS Withholding Estimator and adjust again.
Annual Review: Make it a habit to review your withholding annually, ideally early in the new year.

By proactively using the IRS Tax Withholding Estimator and adjusting both your federal and state W-4s (or making estimated payments for other types of income), you should be able to get your tax owed down to zero or a very small amount next year.

Helpful links:

Please feel free to reach backout with any additional questions or concerns you might have!

Thank you for joining us today and have an amazing rest of your day!

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer.”

Terri Lynn