We had a baby in 6/06 and thought our 2006 federal refund would go way up; we received about a $1200 refund last year. In 2006 I made $44,557.50 and had $4563.19 federal withheld; my husband made $47,500 and had $4750 withheld. We own a home and deduct the mortgage interest and we have student loans and deduct that interest. We thought having a baby would increase our refund since the exemption went up, but TurboTax is only calculating a $250 refund...what gives??? Should we maybe file separately? Thanks!
2007-01-30 02:24:13 · 10 answers · asked by aprilcioch 2 in Business & Finance ➔ Taxes ➔ United States
If nothing much changed between 2005 and 2006 except for having the baby, put the two returns side by side and see what the differences are - possibly something was entered wrong. Usually having the baby would lower your taxes, so would increase your refund if nothing else changed. Was your withholding less?
Filing separately won't help. It would give you total tax about the same or more, depending on your situation. If one of you itemizes, then the other would not be eligible for a standard deduction, plus you would not be eligible for a child care credit if you have those expenses but file separately.
Good luck, and enjoy that baby....
2007-01-30 03:16:50 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
no longer something has replaced? particularly?? a million. greater earnings 2. have been given married 3. replaced submitting status 4. Tax expenses, exemptions, deductions & credit have replaced provided that 2008 5. You archives as MFS fairly of MFJ. MFJ will generally bring about decrease entire taxes than MFS. All of that suggested, do no longer waste it sluggish comparing refunds between years. that is an fully meaningless assessment. in case you lay final 3 hundred and sixty 5 days's return next to this 3 hundred and sixty 5 days's and evaluate line-for-line the changes would be glaring. The MWP credit is a wash. It develop into stepped forward with the aid of decrease withholding and then he claimed it while he filed. the two cancel one yet another out. it is likewise glaring which you do no longer comprehend what a tax refund is interior the 1st place. that is not any longer some variety of bonus which you get for working, yet basically exchange for overpayment of your taxes. in case you got something at Wally worldwide for $50 and gave the cashier a $one hundred and she or he advised you which you will might desire to attend until next April on your exchange, you will flow postal and you be attentive to it. Why is it which you're so happy to enable the IRS do the comparable area of you?? basically does no longer make ANY experience in any respect.
2016-11-01 21:24:44 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Assuming that the calculation is correct, I think you should be very pleased rather than disappointed. It means that you have had the use of most of your hard-earned money throughout the year.
When you get a large refund, it means that you have given the U.S. Treasury a no-interest loan of your money, which is worth less now (at refund time) because of inflation.
The best strategy is to adjust your withholding so there is little or no refund. Invest the extra from each paycheck in an IRA or 401(k), and you'll be way ahead on April 15 compared to getting a large refund.
2007-01-30 03:12:59 · answer #3 · answered by Anonymous · 5⤊ 0⤋
How much was withheld in 2005 as compared to 2006? When you updated the W-4, you probably ended up reducing the amount of withholding on each paycheck - so that's why you are getting less of a refund.
2007-01-30 02:32:51 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Did both of you change your W-4 withholding to relect the new baby?
If you did, then less taxes were taken out on a weekly basis, thus resulting in a lower income tax refund. Check out how much was withheld in 2005 as compared to 2006.
As you and your hubby are making nearly $100,000 a year, you are in the upper tax brackets and starting to feel the bite of the evil tax man.
2007-01-30 03:20:17 · answer #5 · answered by Gem 7 · 1⤊ 0⤋
Go ahead and use Turbo Tax to prepare separate returns. Then file whichever way works out best for you. I'll bet a steak dinner that you'll do better with your current joint return, though.
Basically your withholdings are just about perfect for the year. Without knowing what your income and deductions were for last year there's no way to say exactly why your refund is smaller than you expected.
2007-01-30 03:42:06 · answer #6 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Filing separately probably won't benefit you at all - but run it through your TurboTax and check it out. If you file separately, you won't be able to claim the child tax credit. You might want to check your W-4s with your payroll offices and see what you are claiming for your withholding. If you claim married and 2 or 3, less taxes are withheld = smaller refund. If you are wanting a bigger refund - claim married and 0 or 1.
2007-01-30 03:12:13 · answer #7 · answered by Missy 2 · 0⤊ 1⤋
You can try to go and fill out your information on www.expresstaxrefund.com like i did with my wife. We filed jointly and are gettin back about $8000 this year (just a bit more than last year). I don't know if something might have been calculated wrong on your return but it sounds like you should be getting more. You can claim all of the other deductions you have as well on that site and just see the calculation after you fill it in. Make sure you're getting all the credits you deserve (most are done automatically on this site as well, which is a plus)
2007-01-30 02:46:59 · answer #8 · answered by smith j 2 · 0⤊ 1⤋
I dont know that much about taxes but i do know some i think you might want to check on that or take it to h&r block and have someone perfecinal look at it. I made 13,000 and i am getting back 1,000 which i normal. but my mom and dad made 50,000 and they are getting back 9,000 try these deductions. home sted, cell phone, health insurance, mortgage interest, child, $500 in gas if you drive to work, there is a lot of deductions that you can use if you bought a new car in 2006 use the sales tax my mom and dad got the whole sales tax back.
2007-01-30 02:35:08 · answer #9 · answered by Anonymous · 0⤊ 4⤋
NO! typically you will end up paying MORE if you file separately.
If you are paying more that probably means that your income went up and your withholding went down. We see this all the time with clients.
2007-01-30 03:54:06 · answer #10 · answered by Dizney 5 · 0⤊ 0⤋