Why did my refund go down compared to last year's? (2024)

FAQs

Why did my refund go down compared to last year's? ›

There are many events that may reduce your refund, including: Starting an additional job (especially self-employment) Getting a significant raise, but your W-4 staying the same. Selling stock, crypto, or other investments.

Salary increase: If you got a salary increase last year but neglected to increase your tax withholding, this could lead to a smaller tax refund when you file. New side income: Say you started earning side income during the tax year but neglected to make estimated tax payments on that extra income.

All or part of your refund may be offset to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans.

Here are a few more of the many reasons that can cause lower tax refunds (or higher tax bills): Making more money (or a spouse making more money, if filing jointly) can reduce the amount of the EITC you qualify for and might even disqualify you from claiming it altogether.

Filing Fees Deducted from Refund

If you elected to have the filing fees deducted from your refund rather than paying by debit or credit card, your refund amount will be reduced by the filing fees.

You may be in line for a smaller tax refund this year if your income rose in 2023. Earning a lot of interest in a bank account could also lead to a smaller refund. A smaller refund isn't necessarily terrible, since it means you got paid sooner rather than loaning the IRS money for no good reason.

If you make $60,000 a year living in the region of California, USA, you will be taxed $13,653. That means that your net pay will be $46,347 per year, or $3,862 per month.

Refund less than expected

If you receive a refund for a smaller amount than you expected, you may cash the check. You'll get a notice explaining the difference. Follow the instructions on the notice. If it's determined that you should have received more, you will later receive a check for the difference.

BFS will send you a notice if an offset occurs. The notice will reflect the original refund amount, your offset amount, the agency receiving the payment, and the address and telephone number of the agency. BFS will notify the IRS of the amount taken from your refund once your refund date has passed.

Why did my refund amount change? ›

Examples that could decrease your refund include: Math errors or mistakes; Delinquent federal taxes; State income taxes, child support, student loans or other delinquent federal nontax obligations; and.

So far in 2024, the average federal income tax refund is $2,850, an increase of 3.5% from 2023. It's not entirely unexpected: To adjust for inflation, the IRS raised both the standard deduction and tax brackets by about 7%.

There are lots of reasons why this might happen. In most cases, the IRS takes part of your refund to pay for outstanding government debts you might owe. These include: Overdue federal tax debts.

Adjusted refund amount means the IRS either owes you more money on your return, or you owe more money in taxes. For example, the IRS may use your refund to pay an existing tax debt and issue you a CP 49 notice.

This is because of the graduated nature of the tax rates, which applies higher tax rates to higher income rates. This is how the marriage penalty might get you: when you combine incomes on a joint return, some of that income can push you into a higher tax bracket than if you were filing as the Single filing status.