WHY DID MY REFUND GO DOWN WHEN I ADDED ANOTHER W-2? When you added more income, your tax liability increased, so you saw your refund decrease. So you are not being taxed on as much of the income on that first W-2. Then you added taxable income–so the refund went down.
How does a second W-2 affect my tax refund?
- Once you enter the second W–2, the software now has the information it needs to properly calculate your taxes, and your refund may go down depending on how you set your withholding for the second job. From a tax standpoint, the best thing to do is to make sure your W-4s are accurate as possible and to update them throughout the year if needed.
Why did my refund go down after entering another w2?
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. You don’t get this deduction with each W-2 you enter, just the first one.
Does having more than one w2 lower your tax return?
If you have multiple W-2 Wage and Tax Statements that reflect your total income, you won’t be penalized with a higher tax liability than if you have only one W-2. However, having multiple W-2s may affect your taxes due to the withholding allowances you claim on them – prior to 2020.
Why did my tax return decrease with more income?
When you claim tax deductions, the amount of your taxable income decreases. When you claim tax credits, your tax liability decreases. Even if your tax rate doesn’t change, a higher taxable income leads to a higher tax liability, which in turn causes a lower refund.
Why was my tax refund lowered?
If your refund was less than you expected, it may have been reduced by the IRS or a Financial Management Service (FMS) to pay past-due child support, federal agency nontax debts, state income tax obligations, or unemployment compensation debts owed to a state.
Is having multiple w2s bad?
If you put multiple w2 forms from different years does that have an effect on how much you get back. The IRS gets copies of your W-2’s an will try to match what they have with what you have reported. If there is a difference, they will correct your return which can cause you to have to repay a refund if you got one.
What happens if you get another W-2 after you file your taxes?
What do I do? You need to wait for the first return to either be accepted or rejected by the IRS. If rejected, you can then add the second W-2 and refile the return electronically.
Why did I get 2 different W2s from the same employer?
You might get more than one W-2 if you work for an employment agency or your company changed ownership or payroll providers. If your federal wage info in boxes 1–14 is the same (or blank on one W-2), and the state info in boxes 15–17 (or local info in boxes 18–20) is different, you’ll enter both on the same W-2 screen.
Why did my employer send me 2 W2s?
You might get more than one W-2 if your employer switched to a different payroll provider or was taken over by another company, or if you worked at different jobs through the same agency.
What if I have more than one W-2?
If you receive multiple W-2 forms, add those amounts and include the total on your IRS Form 1040. In general, if you receive duplicate W-2 forms for the same amount from the same employer, file only one of the W2s for taxes and include only the income from a single form on your return.
Why did the IRS change my refund amount?
All or part of your refund may have been used (offset) to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans. We also may have changed your refund amount because we made changes to your tax return.
Does your tax return decrease when you make more money?
Specifying more income on your W-4 will mean smaller paychecks, since more tax will be withheld. This increases your chances of over-withholding, which can lead to a bigger tax refund. That’s why it’s called a “refund:” you are just getting money back that you overpaid to the IRS during the year.
What does reduced refund mean?
What does it mean when my refund has been reduced by the bureau of fiscal. It means that due to some debt part of the refund has been taken and applied to that debt. The remainder of your refund will be processed as usual; an offset shouldn’t delay it, unless of course your entire refund was applied to your debt.
What if my tax refund is more than expected?
If you receive a refund to which you’re not entitled, or for an amount that’s more than you expected, don’t cash the check. For a direct deposit that was greater than expected, immediately contact the IRS at 800-829-1040 and your bank or financial institution.
Why is my refund less than expected TurboTax?
If your IRS-issued tax refund comes in around $35 or $40 less than the amount shown in TurboTax, it’s probably because you used the Refund Processing Service option to deduct your Turbo Tax fees from your federal tax refund. You can also get this information by looking up your refund at the IRS Where’s My Refund page.