Ok ... yes all income must be reported on the federal return ... and then complete both part year state returns with all the income still in tact ...
Why did my refund drop when I entered a
second W-2?
Most people see their
refund go down, sometimes by a lot, after entering a second W-2. This is
because we start you off with the full standard deduction, which we subtract
from the income you’ve entered so far. This usually gives you an artificially
low taxable income at first, which translates to an artificially high refund.
Let’s take a closer look with an example:
Let’s say Jose has two W-2s
from two different employers with identical amounts: each has $16,000 in wages
and $1,600 in federal withholdings. His gross income for the year is $32,000,
with total withholdings of $3,200.
After he enters his first
W-2, we subtract his standard deduction of $12,000 from his wages of $16,000, for
a total taxable income (so far) of $4,000, which puts him in the lowest tax
bracket (10%). We subtract his $400 tax from the $1,600 withholding, and Jose
sees a $1,200 refund in his refund monitor. So far, so good.
Now Jose enters his second
W-2. Because he got $1,200 back on his first W-2, he expects to get another
$1,200 for the second one, increasing his refund to $2,400. But much to his
dismay, he sees his refund drop a
couple hundred bucks to $990 after entering the second W-2. How could this
happen? We’ll explain.
After entering his second
W-2, Jose's gross income increased to $32,000, but his standard deduction of
$12,000 remained the same. His taxable income (gross income minus the standard
deduction) increased to $20,000, which also bumped him up to the 12% tax
bracket. Per the IRS tax table, the tax on $20,000 for a single filer like Jose
is $2,210. Subtracted from his $3,200 withholdings, he should get $990 back –
just like TurboTax says.
Keep in mind: The
Deductions & Credits section is yet to come; we’ll walk you through it
after you’ve finished entering all of your income. Your refund amount gets more
accurate as you go along and will stop fluctuating once you've finished
entering all of your information.
Related
Information:
·
Why
doesn't my refund increase when I enter a deduction?
Now for NY ... there is 2 ways to determine your taxes and NY uses the worse way ... you are only taxed on the part year return income however they use the total income vs NY income % based system so when you removed the other state income the NY taxes went down .... review the NY return carefully to see how they compute the taxes.
