Why do my spouse and I owe money at tax time even though we both have taxes withheld?

Withholding for each job is calculated as if that salary is your only income. When two earners combine, your household income can land in a higher bracket than either paycheck's withholding assumed, so not enough is taken out overall. This is the classic 'two-earner shortfall.' The fix is Step 2 of the W-4: either check the two-jobs box on both W-4s or use the IRS Tax Withholding Estimator to add an extra withholding amount. Couples who both earn similar salaries are especially prone to this. Adjust early in the year so the correction is spread over many paychecks rather than concentrated. Running the numbers once a year prevents an unpleasant April surprise.