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bray49
Returning Member

Why do we owe more taxes in 2021 vs 2020?

How did the Federal taxes we owe go from $6231 to $9222? As you can see, not much changed from 2020 to 2021. Married filing jointly. Total and Taxable incomes are a little less because of working less overtime. Took standard Deduction and we didn't change our W-4s. Can someone explain the huge difference? We did sell a house and then buy a house in September 2020. Is that the reason?

 

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2 Replies

Why do we owe more taxes in 2021 vs 2020?

@bray49

 

for 2021, I can see that your taxable income is almost all wages as I can look at a tax table and come pretty close to $9222 in taxes 

 

but for 2020, I can't.  Does the 2020 income have a large capital gains component? did you report capital gain on the sale of that house. 

 

So in effect, while you incomes appear to be the same on the surfuce across the two years, you worked a lot more in 2021 vs 2020??????

 

the capital gains would be taxes at a lot lower rate than the wages...and when you do the math, 2020 would come out with a lower overall tax than 2021..

 

 Suggest comparing your W-2s from 2020 and 2021 - is there a significant difference?????

 

 

TomD8
Level 15

Why do we owe more taxes in 2021 vs 2020?

I'd suggest printing each year's tax return and comparing them line-by-line.  That should enable you to find the discrepancy.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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