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jabs43
Returning Member

Federal Employee social security deduction stopped

Worked for the federal government in two different jobs this past year.....second one did not take the social security deduction as per the "stimulus" for federal employees...  When I fill in my W-2 for my first job, I have a refund over $2000.00 but when I add the second W-2, my refund drops to under $500.  Then I am questioned if I filled the form out correctly.  Is this the way it should work?  

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2 Replies

Federal Employee social security deduction stopped

That has nothing to do with the deferment of SS.

 

You made more $$ , so perhaps you jumped into a higher tax bracket.

 

Usually people with more than one W-2 have the same question.  what happens at the start of your preparation, is that the Std Deduction has automatically been applied to the first W-2 income, reducing the eventual "taxable" income.  Then you enter the second W-2 income ....but the Std Deduction amount may have been used up already, so ALL of the second W-2 ends up being taxed.

 

The point is, you are taxed based on ALL your yearly income, not just small part.....so your taxes owed, or refund received, is based on everything ....and how much as a total was withheld for prepaying taxes during the year with your income.........not enough withheld, and you could end up owing more.

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Yes, you are asked to check your form data closely.  sometimes folks double-hit a key, or put a comma in place of a decimal point.....and that ends up as a mess.  Certainly, there may be something else in that W-2 that needs to be looked at again...but that depends on what you are being asked to review.

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Federal Employee social security deduction stopped

The social security tax deferment is not handled on your tax return.  Instead, the employer must withhold additional "catch-up" taxes from your paychecks during 2021. 

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