There is a lot in your post, so I am going to focus on the areas that stick out to me, plus the caveat that this should all be run through a W-4 Calculator
Based upon your combined income of approximately $330,000 in both 2024 and 2025, with net rental income of approximately $15,000 the taxes on that amount, which is all in the 24% tax bracket is about $3,600. So of that owe only about 21% is related to the rental income. This is part of the issue. You can choose to make estimated tax payments or add this into other income on Step 4 Line (a).
So the remaining 79% under withholding is related to the two jobs. At a minimum you should be checking the box on Line 4(c) in Step 2, which is the Multiple Jobs or Spouse Works, though you should actually be using the worksheet as it is more accurate. Without knowing the year over year owe it is hard to tell what the reason for the increased owe is. I would compare the 2023 and 2024 tax withholding for each one of you and see where the changes are.
Ultimately, you need to also see what the withholding is year to date for 2025 as well. Then compare that to the income this year. You may also want to build in extra tax withholding in Step 4 (c) for both of you as well.
All the best,
Marc T.
TurboTax Live Tax Expert
28 Years of Experience Helping Clients
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