I only got $2000 back on my 2007 tax return, Why?

I only got a small amount on my 2007 Tax Return. I am married filing jointly in New York. This is my first job and I had an income of about $21,000 and had about $2000 withheld Federally and $1000 withheld in State. My wife had about $33,000 of income and $4000 Federally withheld and about $1500 withheld from the State. Together we got about $6500 in personal deductions and $10,700 in standard deductions - Federally. We had about $15,000 in State deductions. I though that I would be able to claim more deductions but turbo tax didn't allow it, at least my standard was higher than the itemized. We only got $950 back on our Federal from $6000 we had withheld together. We got about $1300 on our State, but why so little on the Federal? Thanks a lot.

Public Comments

You need more deductions like children, interest, charitable giving, business loses and so on.
You need to move to a state without a state income tax.
Buy a home. Seriously, I know that you provided a lot of information, but the reality is that when you make money, you have to pay taxes, unless you properly prepare to minimize that reality. I would suggest that you sit down with an experienced Financial Planner and/or CPA to discuss your situation, and develop a plan to minimize your tax exposure. You are on the cusp of being a viable client for one of these folks, and you should use your status to push for the best possible scenario. I don't do business in New York, but I would look at you as a high-value potential client, so realize that as you shop for an advisor. Find someone with at least two successful years under his/her belt, and a good substance between the ears. If you find someone golden, you do have Gabriel's gift. Be smart, diligent, and good luck to you! P.S. If you really want to get more back on your taxes, buy a house and have kids. :-)
You paid $6,000 of federal income tax and got back $950, so your total federal income tax was $5,050 on $54,000 of income. That's a little less than 10% federal tax, which sound normal. Many people pay a higher percentage than you. You should try to have your withholding come close to what you owe by the end of the year, because any money you got back is money you loaned to the government interest free. You are better off having that money and earning interest on it. Be glad that your refund was not large.
way more than I did! Lucky
That is normal taxation.
Your taxable income would have been about $36,500 (your 54K joint income, minus the 10,700 standard deduction and two $3400 exemptions) from the info you give, so your federal tax would be around $4696 on a joint return. By those numbers, if you had $6000 withheld for federal, the $950 you got back sounds about right. If you filed separately, you probably paid more than you would have on a joint return. I'm not sure you understand just what a refund is. Through the year you might have money withheld from your paycheck for federal income tax. At the end of the year, you prepare a form called a tax return to calculate how much tax you owe total for the year, and compare that to what was withheld. If you had more withheld than your total tax, you get the extra back as a refund. If you didn't have enough withheld, you have to pay the rest rather than getting a refund. A refund isn't some sort of bonus the government gives you for working. It's like if you went to WalMart and bought $16 worth of items, but gave the cashier a $20 bill. You'd get a "refund" of $4, but it's not them giving you something, it's just getting your own money back.