My wife pays into Teacher's Retirment Service, in Texas, rather than Social Security. Why does our return decrease substantially when I enter her W2 on our return?

[adam155]

Turbo Tax does not realize that a Teacher's income, in Texas, is not required to pay Social Security Taxes. I will use my CPA. I spoke with Customer support and they have no answer(s) to give me. They can't explain why the software is missing this important detail. This detail is worth thousands, on my return.

[CherylW]

I don't think it's because of her Social Security Tax.

You can't rely on the refund meter until you're all done entering her return.

To see the effect on your tax with or without the W-2:

1.       Go to Tax Tools on the left-hand side.

2.       Go to Tools.

3.       Go to View Tax Summary.

4.       Click Preview my 1040 from the left-hand side.

[mikio111]

i have a similar situation. how did you resolve this issue?

[ThomasM125]

Contributions to a retirement system should not increase your tax liability.

The decrease in your refund may not have anything to do with the retirement contributions. It could be that her tax withheld as reported in box 2 on her W-2 form is less then the tax on her income. I suggest you compare your Form 1040 in 2024 line by line with your Form 1040 in 2023 and see where there are differences. That will help you narrow down what is causing your refund to decrease.

 To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done