<prompt> Human: As tax filing season gets underway, people are starting to post queries indicating confusion about why their tax software shows a big refund when theyve only entered one of several W-2s and then that refund indicator drops to a smaller refund or even says they owe taxes as they enter other W-2s.This can happen whether you are a Single taxpayer with multiple W-2s or are Married taxpayers filing jointly who both have incomes.The reason this happens is the interim refund value isnt really a valid figure, because it is misrepresenting what your income is and how it gets taxed.Ill give some numeric examples to illustrate, but first it may help to know that your W-4 allowances setting is going to influence how much of the income you earn at one job is going to be considered untaxed by the withholding system as it estimates your yearly tax in order to figure out what to withhold from any particular check.In 2017, for Single filers: considered not taxed 2300 4050 allowancesIn 2017, for Married filers:considered not taxed 8650 4050 allowancesLets see how this plays out in some scenarios. Im using 2017 tax numbers here, since right now people are struggling with interpreting their 2017 tax situations.---EXAMPLE A: Single filer with two jobs all yearSuppose you are a Single filer with a 24K job and a 36K job and on both your W-4s you put 0 allowances, thinking that would cause more than typical withholding. Lets say the 24000 job had 2789 withheld and 36000 job had 4589 withheld, which is likely amounts for full year withholding. Job 1: 24000 wages, 2789 withheld using S-0 Job 2: 36000 wages, 4589 withheld using S-0Lets see what happens when you enter just Job 1 W-2 into typical tax software. Here is what the software interprets is happening.income 24000deduction 10400taxable income 13600income tax 9325 10 4275 15 1574payments 2789refund 2789 - 1574 1215 Yay!I put the refund in scare quotes because this is an invalid number, since only one income has been entered. If this were your only income, you would indeed get this amount of refund. And this refund number certainly gets you thinking that the withholding at the first job was more than enough. ---What happens if instead you enter just Job 2 W-2 into software? Similarly, it would tell you youre getting a refund if thats your only income.income 36000deduction 10400taxable income 25600income tax 9325 10 16275 15 3374payments 4589refund 4589 - 3374 1215 Yay!By the way, the apparent refund is the same in this example because in each case the withholding system was told to use 0 allowances instead of 2 allowances, and this made the withholding system imagine your income in each job would be 4050 2 8100 more than it really was, which causes about 8100 15 1215 too much withholding to happen for that job considered by itself.In other situations, you may find that the nonsense refund values you see when you decide to switch the order of entering W-2 will be different, as a consequence of how allowances settings were done and what tax bracket each income seems to put you in.Notice that no matter which W-2 you enter, the withholding systems believe that some income is not taxed, some is taxed at 10, and some is taxed at 15, but no income is taxed at 25. This turns out not to be true when you actually compute your tax.---Lets see what happens when you enter the second W-2 after entering the first W-2. Now the software has your actual total income information and total withholding information, and the final result is valid.income 24000 36000 60000deduction 10400taxable income 49600income tax 9325 10 28625 15 11650 25 932.50 4293.75 2912.50 8139payments 2789 4589 7378amount owed 8139 7378 761 Hey!Instead of getting a refund, you actually owe about 761. Yikes!---What happened?Was something wrong with the withholding at Job 2? Not really. No more than what was wrong with the withholding at Job 1.Your withholding wasnt actually enough. Using Single 0 W-4 settings at both jobs wasnt enough to account for the actual tax, because some of the income really does get taxed at 25 when you stack your two incomes together. One way of thinking about this is that the withholding systems at both jobs effectively thought of this as how the income falls into brackets:considered not taxed: 2300 2300 4600 because of use of 0 allowances considered taxed at 10: 9325 9325 18650considered taxed at 15: 12375 24375 36750considered taxed at 25: nothingIn reality, when the two incomes are combined, this is how the actual income falls into brackets:not taxed: 10400taxed at 10: 9325taxed at 15: 28625taxed at 25: 11650Although the withholding had a low value 4600 for tax-free space compared to reality of 10400, the withholding had a very skewed idea of how big the tax bracket spaces are, so the withholding systems interpreted more of the income as being taxed in lower brackets.Its not fruitful to blame the withholding at each job. At each job, the withholding system is just following the instructions conveyed by 0 allowances, and it is hamstrung by not knowing the total income. Each job treats your income as if its the only job. Solution: This taxpayer should have considered using S-0, S-0 settings but also have extra withholding taken from paychecks to send in about 760 more tax across the entire year. Extra withholding of 30 from biweekly paychecks at one of the jobs would have been enough. However, owing 760 at tax time isnt going to cause this taxpayer any underpayment penalty, because its under 1000 shy.tldr: If your overall withholding was not enough, its still possible for you to see an apparent interim refund value when you enter just one W-2 into tax software. You need to ignore this interim value because it doesnt represent a real refund you could get, since it is not based on knowing about all your income and all your withholding. Also, you should not blame the second job as having faulty withholding.Ill append another scenario in a comment, involving married taxpayers, as this post is already long. Edit: Link to EXAMPLE B, a married couple who see two different meaningless refund numbers depending on whose W-2 is entered first.Assistant: And, since some of these kinds of posts ask... no, you cant just not report some of the income to get the larger refund.Human: I might also point out that when youre filing Married Filing Jointly with two earners and you see an ersatz refund value drop when you enter second W-2, you cant solve this by instead using Married Filing Separately filing status. The ersatz refund value each of you sees when entering just your W-2 into tax software with MFJ status active will not match the valid value you will see if you enter just your W-2 into tax software with MFS status active. You might really have some different amount of refund, or you might find you really owe. Its because tax brackets for MFS filing status are smaller than for MFJ filing status.  <response>: My wife tried to argue this filing separately point with me so she tried to file separately. We were getting about half of the refund we would get filing together. 