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Author: ThyPeace Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120800  
Subject: Income down, taxes up, me confused. Date: 2/13/2012 11:19 AM
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Hi guys! I hope this is the right place to post this question.

I use TurboTax to calculate my taxes and it's always made sense to me before. This year's results are just confusing to me, though, and I'm not sure where to look for help.

The basic issue is that my taxes have gone up by quite a bit since last year, and I can't figure out why.

- Income is down by about $2,700, and down in each category (wages, interest/dividends, capital gains).
- Deductions overall down by less than $150 (State and local taxes up, real estate taxes up, mortgage interest slightly down, gifts to charity slightly down)
- AMT calculation is down by $300.

And yet my overall taxes owed has increased by $1,911. Is there a change to the tax code that I missed somewhere?

Thanks much!
ThyPeace, taxed in brain as well as in pocketbook.
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Author: dusty2004 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115065 of 120800
Subject: Re: Income down, taxes up, me confused. Date: 2/13/2012 11:42 AM
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Do you have children? If so how old?

Did anyone take college classes in 2010 and not in 2011?

Dusty

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115066 of 120800
Subject: Re: Income down, taxes up, me confused. Date: 2/13/2012 12:05 PM
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And yet my overall taxes owed has increased by $1,911.

Are you looking at the balance due to the IRS, or at the total tax, which is a few lines up from that?

If you're looking at taxes owed, you need to compare your withholding to the prior year as well.

--Peter

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Author: ThyPeace Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115067 of 120800
Subject: Re: Income down, taxes up, me confused. Date: 2/13/2012 12:05 PM
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Nope, no kids in the equation (I have one but for complicated reasons don't claim her on my taxes) and no college classes either.

ThyPeace, still trying to figure it out.

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115068 of 120800
Subject: Re: Income down, taxes up, me confused. Date: 2/13/2012 12:13 PM
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- Income is down by about $2,700, and down in each category (wages, interest/dividends, capital gains).
- Deductions overall down by less than $150 (State and local taxes up, real estate taxes up, mortgage interest slightly down, gifts to charity slightly down)
- AMT calculation is down by $300.


If you're in AMT land state and local taxes aren't deductible. Neither do you get a personal exemption.

You should also take a look at the payments section of your 2010 return to see if there was a Making Work Pay Credit. That doesn't apply to 2011 returns.

Phil
Rule Your Retirement Home Fool

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Author: StockGoddess Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115071 of 120800
Subject: Re: Income down, taxes up, me confused. Date: 2/13/2012 5:40 PM
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Maybe LAST YEAR was the year you made the mistake?

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Author: ThyPeace Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115073 of 120800
Subject: Re: Income down, taxes up, me confused. Date: 2/13/2012 11:29 PM
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After going back through everything, I found the error. I have a fairly large dividend income from a single source. They don't upload their data, so I had to enter it by hand. I had entered the amount in box 1a for dividends, but not 1b for qualified dividends. Suddenly my taxes are exactly where I thought they should be. Whew! I'm much relieved, as I had made some careful adjustments last year to try to get my taxes to even out -- life has calmed down considerably, which means many fewer wild swings in income and other tax-affecting events.

So instead of owing nearly $2,000 more than I thought I was going to owe, I owe $250 on the Federal level and will have a small refund from the state. Muuuuch better.

And a good lesson in double-checking! Thanks for the suggestions, everyone!

ThyPeace, less taxed.

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