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scferet
New Member

If I add my W2 or my husbands W2 separately we will get money back. But when we add both W2 together then we have to owe money. Why? Should we file married separate?

 
3 Replies
VolvoGirl
Level 15

If I add my W2 or my husbands W2 separately we will get money back. But when we add both W2 together then we have to owe money. Why? Should we file married separate?

Because we have a progressive tax system.  The more total income you make you pay a higher percent for tax.

 

You only get one refund or tax due for all your income combined.  The Refund Monitors won't be right until you have entered all your income.  So don't look at it until you are done.

 

Because you only get one standard deduction no matter how many W2s you put in. Turbo Tax starts out by giving you the Standard Deduction.  You entered more income when you entered the second W2 but you didn't enter more deductions.  And each job only withheld taxes like it was your only job for the year.  You might want to adjust your withholding.  Also as you add more income you might not be getting as many credits as before like the EIC credit.  And it was probably giving you the EIC credit until you went over.

 

See,   https://ttlc.intuit.com/community/refunds/help/why-did-my-refund-drop-when-i-entered-a-second-w-2/00...

VolvoGirl
Level 15

If I add my W2 or my husbands W2 separately we will get money back. But when we add both W2 together then we have to owe money. Why? Should we file married separate?

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

 

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

 

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

 

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

 

And contributions to IRA and ROTH IRA are limited when you file MFS.

 

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

 

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

SweetieJean
Level 15

If I add my W2 or my husbands W2 separately we will get money back. But when we add both W2 together then we have to owe money. Why? Should we file married separate?

No. File Joint. The refund meter is meaningless until you are completely finished.

When you file Married Separately, the tax brackets are different, as are the deductions and credits.

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