Doing taxes today, I entered tax info for my first job and was happy with my tax return. I'm a full time student so it wasn't much. about 450. Entered info for my second job and it jumped down to 350. Why would I get more back with one job than with 2?
wtfdude: The USA has a progressive tax, which means that each dollar you earn is taxed at a higher rate than the previous dollar. That way the government gets most of its money from people who can afford it.
Someone who earns $10,000 pays no tax, someone who earns $20,000 pays $1,000 tax, and someone who earns $30,000 pays $2,500 tax (approximately).
So if your two jobs earned $10,000 and $20,000, they would withhold $0 and $1000 for tax, for a total of $1000. But you actually earned $30,000 and need to pay $2,500.
the more you make the higher the income tax rate
When you only have one job entered, the system thinks it's your only job, and all your deductions are already applied to it, so there's nothing left for your second job and the whole amount is taxed.
Because each job withholds as if it is the only one, but income tax liability is based on total income, and income tax is progressive (the more you make, the more you pay).
The number you see on the software is not accurate until all info is entered.
Because when a person makes more money, the government keeps more, so the person gets back less. When a person makes less, the government keeps less so the person gets back more.
Because the more you earn, the more you are taxed. When you work more than one job, none of the employers know anything about your outside earnings, so you arte taxed at a lower rate on all of them.
You must correct this yourself – if you choose to – by adjusting your withholding through the form W-4. People who work a full-time job might claim one allowance for that job and for the part-time job, claim zero (so more is taken out for that job).
In your case, you don't need to do anything. You're still getting money back – an interest-free loan to the government all year. I arrange my withholding so that every April, I am writing the government a small check. I get the benefit of using all of my money all year. What I pay to the IRS is an interest-free loan to ME.
Now is the age to start learning that bigger refunds are NOT beneficial to YOU. They are for people with no discipline to save money.
Because the taxes withheld on your 2nd W-2 was $100 less than that the taxes you owe on that additional income.
When you do your taxes, you're figuring out how much tax you should pay on your TOTAL income after deductions. Then you subtract what your employer(s) already sent in for you. If they didn't send in enough, you send a check to make up the difference. If they sent in too much, you get some back.
I'm guessing your 2nd job didn't take as much taxes out as they should have
Because you are taxed on your total income.