topic Re: What am I missing?? in Get your taxes done using TurboTax

What am I missing??

theabe — Fri, 06 Mar 2020 21:39:28 GMT

With a taxable income increase of $2645 from over last year, is it logical that my taxes due on that amount could be $1070? I'm in the 12% tax bracket. What am I missing?

Re: What am I missing??

ReginaM — Fri, 06 Mar 2020 21:54:56 GMT

Take a minute and review the data that you input into TurboTax to make sure it is right. If it is,

There could be a couple of reasons that you are getting back less this year then last year.

Back in 2018, the IRS reduced the amount withheld from employee paychecks so people had more take home money. This was done because the IRS did away with the personal exemption and increased the standard deduction. The net affect of this has lowered the amount of refunds realized by the taxpayer.

You may want to verify that you entered everything into TurboTax correctly by following these steps:

Select Tax Tools on the left hand side of your screen,
Select Tools,
Select View Tax Summary,
Select Preview my 1040 on the left hand side of your screen.

Also, you might want to file a new W-4 with your employer to make sure you are having enough withheld to pay your taxes. Here is a link to the IRS Withholding Estimator to assist you determine how much you should have withheld by your employer.

Re: What am I missing??

theabe — Mon, 09 Mar 2020 02:11:47 GMT

Thank you for your timely reply. A few more details from me would have been helpful, earlier. Sorry.

Please consider that I am in my 70's, retired for more that a decade and I haven't had a 1040 for many, many years.

I followed your suggestion and verified my data entry in the "tools / tax summary" as well as an over the shoulder verification from a family member.

I'm in the 12% tax bracket, and earned $2645 more in taxable income in 2019 than I did in 2018, yet turbo tax says I owe $1070 in taxes [40% of my taxable income, which was $38,348].

Care to offer any additional feedback? If not, is there someone you might refer me to?

Re: What am I missing??

theabe — Mon, 09 Mar 2020 02:14:31 GMT

correction to my last post:

40% of the increase in my taxable income, not my total taxable income.

Sorry

Re: What am I missing??

ThomasM125 — Mon, 09 Mar 2020 02:38:56 GMT

An increase in tax due is not the same as an increase in tax. An increase in income of $2,645 might equate to an increase in tax of $317 if you are in a marginal federal tax bracket of 12%.

However, that isn't necessarily true, as you may have credits or deductions and changes to items on your tax return from year to year than can affect your income tax, besides just an increase in income.

The tax withheld from your pay (in box 2 of your W-2 form) will have a dollar for dollar affect on your tax refund. The first thing you should do is compare that number to what it was in the previous year. If it went down $753, that would explain the change in your tax this year.

To be sure, you should compare your return last year to this year and see where there are differences and that would help us better answer your question. You can view your tax return in TurboTax as follows:

1. Find the "Tax Tools" option on your left menu bar and click on it

2. Click on "Tools"

3. Click on "View Tax Summary"

4. On your left menu bar find the "Preview my 1040" option and click on it