When filiing taxes for two jobs, it says I have a refund lesser than what it should be?

Question

..what is the problem?

Answer 1

The problem is in your perception and lack of understanding of the tax system.

If you have two jobs, they both withhold taxes as if they were your only employer. They have no way of knowing how much income you make at the other job and cannot account for that income when they withhold taxes from your pay.

It's up to YOU to ensure that enough tax is withheld. If you're getting a refund, enough is being withheld so you don't need to worry about it.

Answer 2

How do you know that the refund is less than it should be? What *should* it be? It's far more likely that you thought your refund would be more than it should. Making twice as much money doesn't usually mean you pay twice as much income tax. It means you most likely have to pay a higher tax rate since federal income tax is a graduated tax. This means that the more you make, the greater percentage you pay (in theory, because the more you make the more you can afford tax deductible things, like the mortgage payment whose interest is deductible).

There's a worksheet on page 2 of the form W-4 that you should use when in doubt about what you should claim for allowances. This is especially important when you have other things that affect your tax return in a big way, like that mortgage payment or a second job.

Link to the IRS Tax Topic 753: Form W-4. It has a link to the form and other information about how to complete it.

Answer 3

BOTH of your jobs are assuming that about $6000 of your earnings will not be taxed (due to your standard deduction and personal exemption.) that's $12,000 in deductions the tables end up accounting for...when you only get to take half that com tax time.

The problem is the withholding tables don't "know" about the other job. The tax is withheld assuming that is the only job you have, which ends up being a much lower yearly income than what you're actualy making. You need to change your withholding to increase the amount withheld in one or both.

Answer 4

The problem is that you have two jobs. Your withholding from each job does not account for the additional tax from the other job. What you need to do is to use the two-job/two-earner worksheet on page 2 of the W-4 form to figure out the correct amount of withholding that should be taken out.

Answer 5

It is a peculiarity of the progressive tax system. You have two sets of income, but only one set of deductions, exemptions, and the like.