Zero allowances on W4 - Still owe.

[supafly208]

Me - 1 job - 0 allowances on W4

Spouse - 1 job - 1 allowance on W4

No kids. Nothing fancy. Just two normal W2 jobs.

We file jointly and have to pay a few thousand bucks.  Why? How do I prevent this from happening again?

[Anonymous]

what do you mean by nothing fancy?     but here are some thoughts.     if your salaries haven't changed much in 2020 , take the cumulative withholding from the latest paystubs  and add to that the withholding that will be taken out for the rest of the year and compare it to your 2019 tax liabilty.   if it's close I would do nothing.  if your going to owe then 1) is the higher paying job claiming Zero exemptions?   2) your spouse could claim Zero.

3) do you get bonuses - if so,  is the withholding on them less than your effective tax rate.  - if so ask that more be withheld.   4) do your paychecks differ radically from pay period to pay period.   - if so the withholding for the larger paychecks may not compensate to offset the lower withholding on the smaller paychecks - in that case you may want extra $ withheld each period. 5) each pay period put some of the money into an account (fee free) that you will only use to pay any balance due - your own withholding.    

also  owing is not the worse thing provided there are no penalties and you can afford to pay.   you either pay with each paycheck or pay on 4/15.   

[NCperson]

Alternative approach 

1) do not change your allowances 

2) take the amount you will owe on April 15 and sivide by 52 (I’d you are paid weekly) or 26 (if you are paid evey other week), etc 

3) full out the w-4 again and add the amount from item 2 as the additional amount you want to be taken out on each paycheck .... that I’m will get you much closer to zero / getting a small refund