My Federal refund is $1000 (just a random number) and I owe GA state tax $20 (just a random number as well). My State tax is still pending while my Federal got accepted the day after I filed my tax and it went down to $980 (-$20). I chose to pay the state tax that I owe through Direct Debit on the day that I filed my tax but it hasn’t taken away from my bank account yet. According to Turbo Tax, Direct Debit means the IRS will withdraw the whole entire owed amount from my bank account. So it means that my refund should be still $1000, right?? And the $20 that I owe will be taken out from my bank account. However that’s not the case. On the main page of Turbo Tax app, it says my total refund went to $980 instead of $1000 after my Federal refund got accepted. I also had to pay $120 to TurboTax because of 2020 Federal Tax Return, 2020 State Tax Return and Refund Processing Service which is $40 each and I chose to pay that $120 through my Federal Tax Refund... From what I understand: $1000 (federal refund) - $120 (TurboTax fees) = $880 total refund and the $20 (owed tax from State) will be taken out from bank account. So I guess my question is, why did the money that I owe from State was taken out from my Federal refund and not the fees that I paid for Turbo Tax?
Please explain like I’m 5.
