Can I owe an underpayment penalty if my withholding exceeds my last year's total tax?

No, if you paid more than 100% of your prior total tax then you should not have an underpayment penalty (unless you are considered a high-income taxpayer then you need to pay at least 110% of the prior year's tax or meet the other exceptions).

Generally, you may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

• Your filed tax return shows you owe less than $1,000 or
• You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.

If your adjusted gross income (AGI) for 2021 was more than $150,000 ($75,000 if your filing status for 2022 is married filing separately) then you avoid the penalty if:

• Your filed tax return shows you owe less than $1,000 or
• You paid at least 90% of the tax shown on the return for the taxable year or 110% of the tax shown on the return for the prior year, whichever amount is less.