Withholding is NOT your tax. It is what the payer puts in your account with the IRS. That money will cover, or not cover, the tax on the return you file.
I get clients who bring in 1099-Rs, W-2Gs, or other tax documents and announce that they had the issuer take out the tax on that income. They ask if they have to even put it on the return since the “tax was already taken out.” It’s funny, they don’t say that about their W-2 withholding or anything they get regularly. It’s only on a special income that they think they have already paid all the income tax. Actually, the withholding is an estimate based on info from the taxpayer. The payer will use one of the W-4 forms to guide what they hold from the taxpayer and send to the IRS. Generally, the withholding assumes that that is the only income on the return. If it is, the taxpayer would be fine come tax time.
But other income, especially without any withholding, can trigger a balance due. The payer can only withhold on the income they know about and have some control over.
Add income without withholding and the taxpayer could have a balance due. Or, combining incomes with withholding can still be a problem if the combined incomes are taxed at a higher rate than if they could file as single.
For example: a single taxpayer earning $70,000 would get a $255 refund from her wages withholding. But she wins a $5000 casino jackpot. She has them withhold on the winning but they only take 10% or $500. Once the taxpayer gets her tax return done she find herself owing $495.
My suggestion? Talk to your tax pro if you are drawing out from a retirement plan, win at the casino, start Social Security or other income. It might not be a problem but it better to know if there is when you can do something about it. Just don’t assume that the withholdings on your income, especially special events, is actually covering the tax it generates.