How Turbo Tax calculates refund amount before adding spouse's W2

I've been using Turbo Tax for years when I was single, but this year is throwing me for a loop. I started my taxes early to get an idea of what my refund might look like before my husband's W2 arrived. When I entered just my information, Turbo Tax showed I'd be getting around $9,500 back! I was so excited! Then yesterday, my husband's W2 finally came in. I entered all his info into Turbo Tax and watched in horror as my beautiful refund dropped by $5,400! Now we're only getting about $4,100 back. We have a toddler that we claim as a dependent, and we didn't have any tax due throughout the year. Both of us had taxes withheld from our paychecks. I'm completely baffled by how adding his income could cut our refund so drastically. I'm planning to have a tax professional review everything just to make sure, but has anyone else experienced this with Turbo Tax? Any insight on why this happens when adding a spouse's information would be really helpful!

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18 comments

Amara Nwosu

•8M

This is actually pretty common and happens due to how the tax calculation works when you file jointly. When you entered just your information, Turbo Tax was calculating your refund as if you were filing as Head of Household (since you have a child) and only using your income. This often results in a lower tax rate and higher credits like the Earned Income Credit. When you added your husband's W2, a few things happened: 1) Your combined income is now higher, which might push you into a different tax bracket, 2) Some tax credits phase out or reduce as income increases, and 3) The withholding from both your paychecks might not have been optimized for your combined income. The good news is that your refund is still positive, which means you're getting money back! Having a professional look it over is always a good idea, especially with family changes. They might find additional deductions or credits you missed.

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Amara Nwosu

•8M

Exactly! Turbo Tax was showing you what your refund would be if you filed without your husband, which isn't really applicable to your situation since you're married and filing jointly. Adjusting your withholdings is a great idea. You can use the IRS Tax Withholding Estimator on their website to figure out the right amount to withhold. Having the correct withholding means you won't be giving the government an interest-free loan all year, but you also won't end up owing a large amount at tax time.

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AstroExplorer

•8M

Yes, it absolutely works with married filing jointly returns! It's specifically designed to analyze multi-income households and can handle complex situations like yours with rental properties. It provides much more than general explanations. The tool gives you specific, actionable recommendations tailored to your exact tax situation, highlighting potential deductions you might have missed and explaining tax implications in simple terms. Unlike a one-time CPA meeting, you can run different scenarios throughout the year to optimize your tax situation before filing season.

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Dylan Cooper

•8M

If you're planning to have a professional look at your taxes, you might hit the same frustration I did - trying to actually reach someone at the IRS to answer questions. After spending hours on hold, I found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 20 minutes. They have this interesting system shown here: https://youtu.be/_kiP6q8DX5c that basically holds your place in line. I was able to confirm directly with the IRS about how adding my spouse's income affected our filing status and credits.

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Dylan Cooper

•8M

It's not just auto-dialing. They use a system that navigates the IRS phone tree and holds your place in line, then calls you when they've reached an agent. You literally get connected to a live IRS person within minutes after they call you back. The reason it works is they have technology that keeps your place in line without you having to stay on the phone. I was skeptical too, but when I got a call back and was immediately connected to an IRS agent after previously wasting hours on hold, I was sold. Much better than wasting half your day listening to the same hold music over and over.

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Fatima Al-Farsi

•8M

Alright, I need to apologize and update everyone. I tried the Claimyr service after my frustrated comment, and I'm shocked to say it actually worked. After three failed attempts to reach the IRS on my own (getting disconnected twice after 1+ hour holds), I got a call back in about 45 minutes and was immediately connected to an agent. The IRS person confirmed exactly why adding a spouse changes your refund calculation and helped me understand which credits were affected by our combined income. Saved me hours of frustration and a trip to a tax office. Definitely worth it during tax season madness.

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Dmitry Smirnov

•8M

For the 2024 tax year, the Child Tax Credit begins to phase out at $200,000 for single filers and $400,000 for married filing jointly. The reduction is $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the threshold. The checkbox is on the current W4 form in Step 2. It's specifically for households with multiple jobs or a working spouse. If both you and your husband check this box on your respective W4s, your employers will withhold taxes at a higher rate to account for your combined income. You can download the form from the IRS website and submit updated W4s to both your employers.

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