IRS Withholding Estimate results vs what TurboTax says I owe

[redheadbaker]

I do our taxes in TurboTax. Two jobs with W-2s, one kid, plus a little side income from my blog that doesn't have tax withheld. I don't pay quarterly estimated taxes.

For the second year in a row, we owe taxes. A lot. More than seems likely based the side income from my blog, minus expenses for running it (hosting, email provider, project management software, etc.). 

I went to the IRS Withholding Estimator to see how we should adjust our forms, and it says we should be getting a refund. 

Is it more likely TurboTax is wrong, or that I'm using the Withholding Estimator wrong? 

[ohgillian]

This is really impossible to answer. Have you printed out your return from turbo tax and compared it to the estimator?

[redheadbaker]

Feb 11, 2023 13:36:20 GMT -5 ohgillian said:

This is really impossible to answer. Have you printed out your return from turbo tax and compared it to the estimator?

Darn, I figured that was going to be the answer. 

No, I haven't printed and compared. I wouldn't even know where to start. 

[origami]

I don’t have a good answer for you because I didn’t have the energy to figure this out but we were in the same boat last year and the year before. I had extra withheld every paycheck and we still owed 5 figures last year. (That could have been because DH screwed up his W4. IDK.) after that I made sure our W4s withheld extra, and that we were both 0 exemptions, withholding at the higher/single rate etc. I haven’t finished this year’s return yet but it’s close to breaking even. So I convinced myself the issue was something with our employers not withholding enough. If you find an issue with TT tho please share.

[redheadbaker]

I figured out what I was doing wrong! I was screwing up the tax estimator.

[jlt19]

I was going to say, I’m pretty sure it’s the estimator. I’ve never understood that, but knew for years that if I wanted a refund, claim 0. If I wanted more money up front, claim the max I should. But the change in the W4 a few years ago really screwed me up and the estimator makes even less sense than it did before!

[kanga1]

We have our taxes done by an accountant as DH is self employed so I can't say for sure but I think the IRS estimator is wrong. We got married in 2022 so I ran the IRS estimator for my W4 and it said we'd get around $4500 refunded. I have all my information so I punched it in to h&r block or turbo tax or one of those estimators and it says we owe $5000. So back to the IRS W4 and it says we'll get a refund. I guess I'll know for sure after turning everything in to our accountant but I think we're going to owe big time

[whiskeytails]

I believe the key is on your W-4 in addition to checking the married filing jointly box, also make sure the box in step 2 is checked for both spouses. This will withhold more and be more accurate.