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Need explanation why my state tax jumped greatly when I added my spouses retirement income. her state and federal deductions were the same as mine.

Need explanation why my state tax jumped greatly when I added my spouses retirement income. her state and federal deductions were the same as mine.

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MichaelMc
New Member

Need explanation why my state tax jumped greatly when I added my spouses retirement income. her state and federal deductions were the same as mine.

Income taxes, at the federal level and as administered by the several states, are based on the concept of a progressive tax. The larger the income that is being reported, the higher the marginal tax rate that is applied. This results in what are commonly referred to as tax "brackets."

When your income had been entered into TurboTax, the tax was calculated based upon the appropriate tax bracket for that income alone. When you entered your wife's income, the combined income most likely pushed the two of you into a higher tax bracket. Please understand, not all of your income was taxed at a higher rate. The higher marginal tax rate is only applied to the amount of income in excess of the top amount for your previous tax bracket.

For more information, please read this article from the TurboTax Blog: https://blog.turbotax.intuit.com/tax-planning-2/what-is-a-tax-bracket-24007/


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1 Reply
MichaelMc
New Member

Need explanation why my state tax jumped greatly when I added my spouses retirement income. her state and federal deductions were the same as mine.

Income taxes, at the federal level and as administered by the several states, are based on the concept of a progressive tax. The larger the income that is being reported, the higher the marginal tax rate that is applied. This results in what are commonly referred to as tax "brackets."

When your income had been entered into TurboTax, the tax was calculated based upon the appropriate tax bracket for that income alone. When you entered your wife's income, the combined income most likely pushed the two of you into a higher tax bracket. Please understand, not all of your income was taxed at a higher rate. The higher marginal tax rate is only applied to the amount of income in excess of the top amount for your previous tax bracket.

For more information, please read this article from the TurboTax Blog: https://blog.turbotax.intuit.com/tax-planning-2/what-is-a-tax-bracket-24007/


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