{ "media_type": "text", "post_content": "Maybe off-topic, but I’ve got a question related to taxes and withholding. 2020 was the first year that both me and my wife made full salaries in our high-paying jobs (she’s a pharmacist, I’m in consulting). We don’t do anything out of the ordinary to reduce our taxes, we just put ~ 6% each towards our 401k’s. No house or kids so our other deductions are limited. Just started doing taxes and got a shock that we owe big. Any others in this situation? Do you just withhold a ton extra on W4?", "post_id": "601763623237210024c053c9", "reply_count": 4, "vote_count": 1, "bowl_id": "552d1d24dc1c586b09d2d051", "bowl_name": "Consulting" }

Maybe off-topic, but I’ve got a question related to taxes and withholding. 2020 was the first year that both me and my wife made full salaries in our high-paying jobs (she’s a pharmacist, I’m in consulting). We don’t do anything out of the ordinary to reduce our taxes, we just put ~ 6% each towards our 401k’s. No house or kids so our other deductions are limited. Just started doing taxes and got a shock that we owe big. Any others in this situation? Do you just withhold a ton extra on W4?

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This can happen if both of your W4's say that you are married and filing joint. Your wife's company assumes her income is the only income between the two of you, and your company assumes your income is the only income between the two of you. You can continue doing this if you believe the extra amount in your paycheck can generate more returns than whatever interest the IRS will charge for the under withholding and you plan for a large tax bill every year when you file. If you want to avoid this, just update both your W4s to single.

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Yep. My spouse and I have owed 3-5k for the past couple of years. We're aware and plan for this. The best way to reduce taxable earnings is to contribute fully, $19.5k each, to your traditional 401(k) each year. Or withhold a ton on W4.

likehelpful

Withhold married filing single, have a few kids, buy a house, start a business

funny

I’ll get right on those last 3 haha

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