TAX Question?

Question

I did my 2005 taxes last year at www.efiletaxreturns.net. This year I was going to do the same thing. I have a W2 form, and I made more money in 2006 than i did in 2005, so of course i paid more taxes in 2006 than i did in 2005. I would say i made almost double the amount and paid double the amount in taxes.

The problem is, when I filled out all the information on the website (the same way i did the year before) my taxes came out to be half the amount i got back the year before. Do you think I did something wrong? Or would that really be the amount I get back. Literally HALF of what i got back in 2005, even though i made twice as much money.

Any suggestion would help.

Answer 1

Of course, that could easily happen. Without figures and specific filing information it is difficult to make a blanket statement to confirm or deny that it is correct or incorrect.
Tax software that I have seen takes the preparer through a series of questions. An incorrect answer can make quite a difference tax wise. While most tax software is fairly user-friendly, there are a number of tax-specific areas that many people either do not know the answers to because they do not understand the question or because they do not fully understand the tax laws.
Perhaps you might ask someone to look it over for you. There are a number of free services in many communities throughout the US. Ask the senior citizens to help you find one near you.

Answer 2

As noted above you may have gone into a higher bracket. Take your 2005 return and calculate the tax manually. Do the same thing for the 2006 return. That will tell you if you got into a higher bracket.

In addition concentrating on the refund is not the way to go. The increase in your withholding versus the increase in your tax bill is not linear. They do not match one another. One may double but that does not mean the other will or did too.

Decide what you want; a refund or more money with each paycheck. With your new income level, modify your W-4 accordingly

Answer 3

You're now in a higher tax bracket. Get a printed copy of the Fed tax thingy at the post office. Inside you'll see a chart that lists the different ranges of taxable income. Find last years, then find this year's. You'll see why.

It also depends on hoiw many exemptions you had both years. If you claimed 1 last year and 2 this year, then they didn't take as much this year so you don't get as much back.

On your W4, change your #exemptions to 0 (Zero) if you're filing single with no kids (deductions). This way more taxes will be deducted than need to be each pay, and next year you'll get a bigger refund.

Answer 4

If your income went up and and your withholding did not keep up, yes that would happen.....or if your income was about the same but your withholding went down, yes that would happen.

Answer 5

did you try www.expresstaxrefund.com

i use them