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Based on what you stated, I agree.
There are three factors that will determine the size of your refund (or what you owe).
Your income determines the amount of tax you owe. This not only includes your wages, but also any other type of income you may have had. Identify any other income you may have had. . Based on criteria established by the IRS there are tables that determine the amount of tax that you owe. Double check your income entries and make sure they are correct.
The amount you had withheld generally come from your W-2 income; however, taxes can be withheld from other forms of income. If the taxes withheld is more than what you owe you will get a refund. If not, you will owe money. Again, double check your entries and be sure they are correct.
You can subtract Tax Credits from the amount of tax you owe. Here are some common Credits:
If you look on your tax return FORM 1040 you can check these entries.
Compare your tax credits to what you had last year. This is the most likely place for a large amount to be.
Thanks John! I have double checked all of my information and it is still saying I owe $800. I have the most amount of taxes taken out of my paychecks, am 22 years old, a full-time student, and my parents claim me as a dependent. Like I said perviously, I have never had any issues with this before, and am just confused at why this year it's so much different!
Yes, For 2020, he standard deduction amount for an individual who may be claimed as dependent cannot exceed the greater of $1,100 or the sum of $350 and the individual's earned income not to exceed the regular standard deduction. If your parents claimed you as dependent on their 2020 income tax return, you may only enter $1,100 as your 2020 standard deduction.
For example, if income was $13,000, then your standard deduction as a dependent was $1,100.
I am curious about this also. Our son is a full time college student, but had earned income of $15,000 in 2020. We are claiming him on our taxes as a dependent. When preparing his tax return, I checked that he can be claimed as dependent on someone else's return I said yes. However, it is applying the standard deduction of $12,400 and I don't this is correct? Thoughts????
@kellyinau wrote:
I am curious about this also. Our son is a full time college student, but had earned income of $15,000 in 2020. We are claiming him on our taxes as a dependent. When preparing his tax return, I checked that he can be claimed as dependent on someone else's return I said yes. However, it is applying the standard deduction of $12,400 and I don't this is correct? Thoughts????
The standard deduction for him would be $12,400 with earned income of $15,000 in 2020.
See IRS Publication 501, table 8 on page 25 Standard Deduction Worksheet for Dependents - https://www.irs.gov/pub/irs-pdf/p501.pdf#page=25
Yes, if his $15,000 income is from wages, he gets the full $12,400 standard deduction.
A dependent's standard deduction is the greater of $1100 or his earned income +$350, but not more than $12,400.
You may be thinking of the pre 2018 tax law, when a dependent was not allowed his $4000+/- "exemption" deduction.
With the tax law change, effective 2018, most students will get the same refund whether they claim themselves or not. The personal exemption has been eliminated and the standard deduction increased.
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