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Federal refund dropped when 2nd (small) job added? |
I did my fiance's taxes yesterday and I first put in his job that he got second, which was a little over $14,000 income, then I put in his job he had first (he quit this job when he got the $14,000 job in 2006) and the income on this job was about $5,600. When I put in the $5,600 job, the refund dropped from $1,300 to $680! We were counting on at least $1,000 refund to pay off a credit card bill, and now it is much much less than we expected. Is this right? I used turbotax. Last year I think he got back close to $900, and he had 3 jobs in that year. Is the government screwing you because you switched jobs??? each job had withholding at a lower rate, but when put together his earnings probably caused substantially higher tax payable. Govt not getting you because of switching jobs, tax rates just higher at higher incomes. They probably weren't taking enough taxes out of the second check. Have him double check with his employer what he is claiming for deductions. He didn't have enough withholding taken out of the $5600 job. It's his fault, not the governments. The amount deducted is based on the elections you make on your W-2. No, they are not screwing you. Apparently you don't have dependents to claim or other deductions (home loan interest, medical expenses) Sounds as if he isn't having enough taken out. Check what he is claiming on his W-4, it should be 0 or 1, if you have no other dependants. Welcome to the real world babes. It may have something to do with tax brackets or maybe he didn't have enough tax held from one of his jobs. See here, for tax bracket info.... http://www.moneychimp.com/features/tax_b... Yes, it's correct. The lower income job withheld taxes at a lower rate, that's all. The government isn't screwing you for switching jobs. They could care less how many jobs you have as long as you pay your taxes. It's up to the taxpayer to ensure enough tax is withheld. Since enough was withheld there is no issue with the IRS. It's up to him to budget his money to pay his bills. Nobody can do that for him. |
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