96171
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

sagaetani
New Member

My refund dropped significantly when I entered my spouse' W2 information, although her federal/state taxes paid on her W2 are reasonable for our income tax bracket.

She takes only 1 exemption, pays the standard fed/state tax per check, but our refund drops significantly when our total household income increases to $130k - did we push over into a higher tax bracket?
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply

My refund dropped significantly when I entered my spouse' W2 information, although her federal/state taxes paid on her W2 are reasonable for our income tax bracket.

It is quite common for this to happen for a number of reasons.  Your tax liability is calculated on your total income (after deductions and credits), not on each W2.  As your taxable income increases, your tax liability increases and you may even get placed into a higher tax bracket.  Depending on your income before, the income from roughly $75,000 - $150,000 was taxed at 25% compared to 15%.

As your adjusted gross income increases, you may also lose eligibility for certain deductions and credits.  And you also have to factor in the fact that either your standard/itemized deductions and personal exemptions were being applied against the initial income (if married filing joint with no dependents taking the standard deduction, the first $20,700 was not being taxed at all).  So, it is likely that all of that additional income was taxed at not only the higher rate of 25% but also it didn't have the benefit of your deductions.

I have included an article below that has more detail on this topic.

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question