How did my withholdings get so far off??

[riverwed070707]

Last year, we overpaid taxes $2,500. I wanted to adjust to be more accurate but DH started working again in January and then went full time in June and i was a bit unsure of how that would all play out in what we owe. I just did a quick tax estimator and even though our income is expected to be higher than ever (by a lot) I'm still showing we're going to overpay by about $3500. It suggested I adust my allowances from 3 to 15 to balance it out... that made me nervous so I adjusted to 8. Hardest thing I'm having trouble understanding is I thought our tax liability would go up, not down, and even though he's contributing now too our total owed is about the same? Is this normal?

[creditcardfree]

Your tax liability will go up, because you are both working your are having MORE money withheld that you didn't before. However, you are having way too much withheld and were last year as the calculator shows. My husband has one job, we have two kids and we withhold at 8, previously 9. By increasing to 15, you would end up having less of your check withheld for taxes for the rest of the year and thus either break even with what you sent in, or get a small refund.