Why is my tax refund so much less this year?

Why is my tax refund so much less this year?

Postby bradleah » Mon Jan 24, 2011 5:51 pm

OK. So I know you can't give me hard answers without all the hard data, but...generally speaking, why is my federal refund so low this year? I'm confused...looking back at my 2009 return, I made about $6000 and change- my federal refund was $729.

This year my earnings came out to $18371.00 and every tax prep service I enter my info into keeps giving me a refund estimate at about $548-500.....????

How is it that I make 3 times as much money and get 200 less back?

Are there changes in tax laws..etc...?

And before you mention it, yes, I know I'm lucky to be getting a refund at all and not having to pay,,,

This just doesnt add up to me.

Thanks in advance for your time/advice/answers!
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Why is my tax refund so much less this year?

Postby brok » Mon Jan 24, 2011 5:55 pm

It means that closer to the correct amount was taken out.

And it is not lucky to be getting a refund. It means that you gave Uncle Sam an interest free loan last year.
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Why is my tax refund so much less this year?

Postby derrie50 » Mon Jan 24, 2011 6:00 pm

yeah I asked my tax ad visor the same thing..I guess some changes have been made this year and we are getting a bit less.or some of us are and the ones most in need it seems....for I made the same amount made last year and got more back last year....It's terrible for me cause I'm a single mom with kids 7&20 and a grandchild as well...not sure of the exact changes but is definitely something I wanna look into more but it still won't change my refund...darn!!!! hope this helps but there were changes made from what the woman said who does my taxes....can't seem to keep up with it all just hope next years is better or we get extra like we did a few years back..that would be cool
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Why is my tax refund so much less this year?

Postby ayers » Mon Jan 24, 2011 6:08 pm

First, if you made $6,000 last year, you most likely had no tax liability and got back everything you paid in. This year, however, because your income increased, you now have a tax liability (the amount you pay the government based upon your income) - you are probably in the 10% tax bracket. Assuming standard deduction and 1 exemption (yourself) your taxable income is somewhere around $10,000, which means you have a tax liability of about $1,000.

If you had the same percentage withheld from your income (about 10%), last year you would have had between $500 and $600 withheld (10% of $6,000), which your would have gotten all back [by your figures they withheld a bit more so you got a bit more back; not unusual). This year, withholding the same 10% means a total of $1,800 was withheld...after deductions and exemptions, your tax liability was again about $1,000, meaning a refund around $800 (by your figures, they may have withheld a bit less, bringing you tax refund down some).

Refunds are not solely about how much you made, but also how much is withheld, how much you have in deductions, etc.
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Why is my tax refund so much less this year?

Postby alanson20 » Mon Jan 24, 2011 6:11 pm

You paid less, it was calculated more correctly in the first place.

Also our tax system is set up to award the lazy and punish the hard working. The harder you work the higher percentage of your income is taken away.
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Why is my tax refund so much less this year?

Postby milan45 » Mon Jan 24, 2011 6:16 pm

for one thing your 2009 income was probably not taxable at all so you got all that was withheld in income taxes
this year, you made three times more money so from owing nothing to something like $1000, that does make a difference
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