Wife and I have been married for almost 2 years. We filled jointly last year and W4 was at Married but withholding at single rate... we had 0 allowances. We got $1500 back last year and so we decided to change to 1 allowance each this time on our W-4. We got our YTD from our Dec pay check and I plugged in the numbers into the Turbo Tax TaxCaster http://turbotax.intuit.com/tax-tools/calculators/taxcaster/ and it says we will owe $2500?!?
Is this accurate and will it be different than when we get our W-2? I did not factor in student loan interest at all but that was $1000 for her and $1300 for me on interest. So I dont think that would make that much of a difference.
Why would we owe so much if we got $1500 back one year to estimated owing $2500 the next year? I dont think we went up in tax bracket.. if we did go from 25% to 28% would that make the difference? We are saving for a house to buy in the near future and this would really suck if we had to pay $2500.
Please, any input would help.