<prompt> Human: I am a meticulous budgeter, and was off put by an estimate from TurboTax that I would owe both federal and state taxes for 2016. I recently finished grad school, found a job quickly after graduation, and started making double payments on my student loans while working 6 days a week at two separate clinics. Total 2016 income 96k, taxable income 73k Overall 50 federal due not so bad, 965 Oregon state tax due not expecting. My student loans through Great Lakes were over150K 116, I spent nearly 38K 21K in interest alone50 of my total expenses in 2016 per YNAB and I STILL OWE STATE AND FEDERAL TAXES? Am I missing something? I feel so defeated! Any help is appreciated.EDIT: I paid off my 13K interest early in 2016 before my grace period ended to avoid capitalized interest, The other 7K was the 700 in interest I paid the other 10 months of the year. Assistant: Am I missing something?It seems you are missing how taxes work.Whether you owe when you file your return will depend on the difference between your tax liability and your tax withholding. If you had more withheld than you were liable for, you would get a refund.If you had a higher tax liability than the amount you had withheld, then you would owe money, like you do now.Since you dont include your total withholding for federal and state, I am assuming you did not realize this. Refunds are not magic money. They are the return of money that was yours all along - which is they are called refunds. You could have much more withheld throughout the year and then have the IRS refund that to you if you desire a larger refund. Or, you could do as you did for the federal income taxes and have just the right amount of withholding happen so that you keep more money in your pocket throughout the year. That is the path most at rpersonalfinance would recommend, unless you have self-control issues and a refund is your form of forced savings, which would be fine.Human: I have always had returns in the past working as a student, but Im now wondering what I can do this year to increase at least my state withholdings so I wont be gouged by another 1000 bill next year. I am currently expecting and will be due in March. Since I work part time at two clinics I do not qualify for paid leave, and will be effectively unemployed. I suppose that will help my taxes for 2017?  <response>: I have always had returns in the past working as a studentYou were in a situation where your tax liability was low or even zero, but you had some tax withholding. So it was all refunded. Last year you were in a situation where you earned a lot of money and did not have enough withheld. but Im now wondering what I can do this year to increase at least my state withholdings so I wont be gouged by another 1000 bill next year.Fill out a new W-4. From the Oregon government website Can an employee have a different withholding amount for state than they do for federal?Yes. The employee should indicate on the W-4 the desired number of state allowances and mark on the bottom of the form: For Oregon Only. Line G on the W-4 form is a federal credit only. Dont include any state exemptions on this lineThat will make it so this doesnt happen again.I suppose that will help my taxes for 2017?Earn less money Owe less in taxes. That is not a net gain, however.But the having a baby? Yes, that will certainly lower your taxable income through the additional personal allowance, possible child tax credit, maybe EITC depending on how low your income goes, dependent care credits if you need to pay people to watch your child so you can work, etc. 