Deductions

Forum|Forum|4 years ago
February 12, 2022
1 reply
1 view

We made $8,000 less in 2021 than the last 3 years, have almost identical deductions, and yet we owe federal taxes of $5,400. For the past 5 years, we have broke even or paid $100 in federal taxes. What is different for the 2021 filing year? Why can I only take standard deductions of $25,100? When I try to do itemized deductions, it is less. My itemized deductions for 2020 year were $35,000.

FangxiaL

Level 10

Here could be several possible reasons why you owe instead of a refund:

Received advance Child Tax Credit payments.
Adjusted your withholding to maximize your take-home pay.
Received unemployment benefits, but did not have taxes withheld.
Having a child who turned 18 in 2021 and now receives the Credit for Other Dependents instead of the Child Tax Credit.
Your mortgage balance has decreased from 2020 which will lower the amount of mortgage interest paid.

Also, check to make sure all the taxes withheld amount was entered correctly.

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