Help me undersand taxes. Where did my refund go?
February 22, 2014 8:30 PM Subscribe
I need help understanding taxes. I have a very standard tax situation, with two W2s as a result of a mid-year job change. I left Job A three weeks into January 2013 and started Job B two weeks afterwards. I entered my info into TurboTax. Job B: ~$800 refund. Job A: ~-$800 refund. Now I'm back at 0. I'm confused and disappointed, and apparently I don't have any ideas how taxes work.
posted by anonymous to Work & Money (14 answers total) 4 users marked this as a favorite
When I started Job A, I didn't know what I was doing, and I declared 3 allowances on my W4. I am single and renting, so this was a mistake, and last year I owed the IRS ~$1000. I never updated my W4, but when I started my new job, I made sure to keep my allowances at 1.
After entering my Job B W2 into TurboTax, I was excited to see that I was getting a refund of ~$800. I then entered my Job A W2 in, and I watched number go all the way back down. In fact, now I owe the state of VA $40. Last year, I owed $30.
So now I'm confused. I obviously didn't pay enough in taxes at Job A, but .. $800 worth? For one month? How come last year I owed $1000 from Job A's withholdings and this year I'm owing $800? And Why do I owe more in state taxes? What would have happened if I had worked at Job A the entire year?
For an idea of how much I made, at Job A, I made ~$60,000, and at Job B, around $70,000. Furthermore, I probably got around $500 from unused leave after separating from Job A.
I know YANMA, so I am just looking for a very high level explanation on why this is possible. I feel like I am missing some very fundamental knowledge on how all of this works, and any clarification would be appreciated.