How should I check my tax return?

Question

My wife and I had our taxes prepared at H&R block. We are 23 and 22, bought a home in November and had 53,000 in w2 income for 2006. Everybody told us that we would get a big refund, being that this was our first year being married, having school loans and a house... Well, we owe 1,500 in federal tax plus 500 in state/local taxes. I expected the state/local bill, but the federal was a bit of a suprise. How can I go about checking to make sure there was not an error? We just dropped our stuff off and then came back to sign the paperwork.

Answer 1

Either go back to the person who did your taxes and have them explain to you why you owed so much and ask how to correct the problem so you don't have to pay next year, or do what someone else suggestioned and go to another office for a double check (which is free.)
I work for H&R Block, and I wouldn't let a client leave without understanding their tax return. If everything you said is correct, than it is probably because you are claiming too many exemptions on your w-4 (means you are not having enough taxes taken out.)

Answer 2

Go over your copy of the return line by line, and be sure that everything you gave to H&R matches the numbers on your return.

Since you only bought the home in November, you would not have had many expenses from it to deduct, just two months worth, so you might not even have had enough to itemize. Itemizing would mean they'd have included a schedule A with your return, and listed various expenses. Since you get $10,300 anyway as a standard deduction, you only benefit for any amount that your total itemized deductions are over that, and then it saves you probably 15% of that. If you itemize, you don't get the standard deduction also - it's either-or. If you didn't have enough this year to itemize, maybe you will next year, since you'll have the house all year in 2007, but don't expect thousands from it.

With both of you working, you were probably already each in a 15% bracket, which is where you probably are as married filing a joint return, so being married wouldn't save you much.

The student loan interest would be subtracted from your income before figuring your tax, so the taxes you'd save from that is around 15% of the interest or $2500, whichever is lower.

Sounds like maybe the "everyone" who told you you'd get a huge refund were wrong. If you had about the right amount withheld, then you wouldn't. A refund is only repayment to you for any amount that you had withheld that you didn't really owe.

Didn't the H&R Block people go over the return with you when you came back to sign it? If they didn't, they should have. That would have been the time to ask them to double check everything, but you could still go back and ask for a supervisor to check it over. It's possible that they made a mistake, but also very possible that it's right.

Answer 3

Take it to another tax office and have them double check it. There is always a chance that H&R slipped up. Make sure they have included any education credits or Hope credits. Earned Income Credit.

Is this bill on top of money you had witheld from your paychecks every period? If it is, you might have a problem. Otherwise, you probably just weren't expecting it to add up as much as it does.

Good luck!

Answer 4

You could sit down with a copy of the 1040 instructions, the information you gave the tax prep, and a spreadsheet and do the calculations yourself.