How to stop owing so much each year

For the past few years, it seems like my wife and I are owing around $3000 in taxes every time we file. So each year, I take the amount I owed for the previous year, divide it by 26 and then add that to be withheld from each paycheck to avoid having to pay again, but lo and behold, this year we owe over $3300 yet again. Is there some better way to calculate how much extra to withhold so we’re not having to pay out so much each year?

838

Expert Alumni

Mar 25, 2025 4:59:46 PM

TurboTax uses the same calculators that the IRS has to determine the withholding, but it is still a moving target unfortunately. Has your income changed year to year? This is usually the biggest factor to an extent, especially if you are straddling tax brackets. Also, if you have income other than just W2s, the formulas get difficult. I would recommend reviewing your withholding at the midpoint of the year, with the focus on the total income. Then you can make an adjustment if needed.

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How to stop owing so much each year