Moebius
02-13-2008, 08:41 PM
Ok, I stumbled across something that intrigued me a bit today so I was trying to get clarification. fyi -I use TaxActOnline to do my taxes, this would be the 4th year now I think, maybe longer. They have a pretty good setup that seems to cover just about everything you could need.
Anyway, we're still waiting on the wife's W2 (long story), but I went ahead and started entering my data for 2007. Set up as married filing joint as normal. I also had a 1099-r from a 401k distibution while changing jobs that had me fearing I might owe. I had requested extra tax beyond the 20% be taken out on the front end of that disbursement to offset, but wasn't sure if they'd done enough.
So as I'm entering my information, TaxAct keeps a running total of return/owed in the status bar. After I get my W2s in, it shows me getting around 4k return. Of course I think there's still the 1099 pending. I enter the first part of the 1099 and the number jumps to owing 2k. Heart stops. Enter the tax witheld from the 1099 and it goes back to around 4k return.
Still no W2 from the wife's employer, so I grab one of her final checks of last year, do a little estimating, and pop some numbers in from here just to get an idea. Now, she's only been working part time at a bookstore this year, so the entire year came in at around 9500 income with 728, 596, and 139 (fed, fica, and medicare respectively) being held in taxes. However, when I add her numbers in, the return value gets cut almost in half!
Is this becuase her income pushed us into a higher bracket, or is there something else going on? If it is the higher bracket, would we be better finally seperately or even married filing seperately? Or is there something obvious I'm missing here?
I think TaxAct lets you review different filing options at the end, but I'm kind of curious why her little part time income could be affecting the return by that much.
Anyway, we're still waiting on the wife's W2 (long story), but I went ahead and started entering my data for 2007. Set up as married filing joint as normal. I also had a 1099-r from a 401k distibution while changing jobs that had me fearing I might owe. I had requested extra tax beyond the 20% be taken out on the front end of that disbursement to offset, but wasn't sure if they'd done enough.
So as I'm entering my information, TaxAct keeps a running total of return/owed in the status bar. After I get my W2s in, it shows me getting around 4k return. Of course I think there's still the 1099 pending. I enter the first part of the 1099 and the number jumps to owing 2k. Heart stops. Enter the tax witheld from the 1099 and it goes back to around 4k return.
Still no W2 from the wife's employer, so I grab one of her final checks of last year, do a little estimating, and pop some numbers in from here just to get an idea. Now, she's only been working part time at a bookstore this year, so the entire year came in at around 9500 income with 728, 596, and 139 (fed, fica, and medicare respectively) being held in taxes. However, when I add her numbers in, the return value gets cut almost in half!
Is this becuase her income pushed us into a higher bracket, or is there something else going on? If it is the higher bracket, would we be better finally seperately or even married filing seperately? Or is there something obvious I'm missing here?
I think TaxAct lets you review different filing options at the end, but I'm kind of curious why her little part time income could be affecting the return by that much.