This is a very common scenario in tax filing, often referred to as the "spousal tax credit" shift. When you filed your taxes individually and indicated you were married, your tax software temporarily assumed your wife had zero income, which allowed it to apply her Basic Personal Amount (BPA) as a tax credit to your return, generating a larger, temporary refund.
Once you added your wife’s actual income, she used her own Basic Personal Amount, meaning the software removed that credit from your return, causing your refund to drop and turning it into a balance owing
If you have medical expenses or donations, you can adjust them based on your income to maximize credit benefits. Technically, there could be a variety of reasons why this occurs, which is quite common.
In TurboTax, go to the "Tax Summary" for both of you. Look at the Total Non-Refundable Tax Credits line. If yours dropped significantly and hers jumped, the software has performed a "behind-the-scenes" optimization.
Hope this helps!
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