Hello,
My husband and I have been filing married filing jointly for years. Until a couple years ago, we were getting refunds, but the last two years, we've owed money.
For reference:
2023 - AGI $93,908 and Taxable Income $66,208. Total Tax $7,507. Total Payments $6,462. We owed $1,061.
2024 - AGI $102,817 and Taxable Income $73,617. Total Tax $8,371. Total Payments $8,364. We owed $7.
I changed jobs in 2021 and I continue to be employed there. When I started, I completed my W-4 to show "married filing jointly".
My husband changed jobs in 2022 and continues to be employed there. Last year, we discovered his W-4 showed "single" instead of "married filing jointly". He changed it to "married filing jointly" midway through last year. (I assume this is why we owe less for 2024 when compared to 2023 above).
Both of our employers use ADP. Both of our W-4s now show "married filing jointly". However, in my ADP, it shows "married filing jointly" but it also shows "higher tax rate: yes". My husband's ADP does not show the "higher tax rate" message.
We would like to either break even or receive a refund going forward. What can we do or change now to have a better outcome when we file for 2025 next year? Would filing "married filing separately" be the better option? Should we make a change to our W-4s?
(side note: I tried using the Turbo Tax W-4 withholding calculator, but it's for 2024)
Thank you.
