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Why is my tax refund so different than last years?

Taxes! We hate paying them, so let's discuss maximizing tax deductions!

Why is my tax refund so different than last years?

Postby honiahaka » Thu Jan 26, 2012 11:53 am

Nothing has changed on my returns besides the amount I made. I file as single-1, no one can claim me, I don't have any dependents, and I don't own anything. In 2010 I made about $22K and in 2011 I made about $24K. In 2010 I got back about $1,600 (not including my state refund) and for 2011 it is telling me I will only get back about $556.00. Why would the number have changed so much?
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Why is my tax refund so different than last years?

Postby elston » Thu Jan 26, 2012 12:01 pm

Somehow you did a BETTER job of basic tax planning!
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Why is my tax refund so different than last years?

Postby alrigo » Thu Jan 26, 2012 12:02 pm

Without knowing ALL of the details of both returns, it is impossible for us to tell you why there is a difference.

You may have previously received some credits that have now expired.
Your withholding status may have changed, and less was withheld this year.

A refund is simply returning the excess you had withheld, beyond your tax liability. Smaller refunds generally mean your withholdings were closer to proper.
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Why is my tax refund so different than last years?

Postby gti » Thu Jan 26, 2012 12:07 pm

Did they take out less? Your refund is just the extra that they took out over what you owe. If they took out less, you get less back.

A big part is that the making work pay credit is gone.
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Why is my tax refund so different than last years?

Postby walbridge » Thu Jan 26, 2012 12:12 pm

It sounds like you might have had less withheld this year for some reason.

Remember the refund you get is simply the amount you owe, minus the amount you have had withheld.
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Why is my tax refund so different than last years?

Postby hreinn » Thu Jan 26, 2012 12:14 pm

No way to say for sure without looking at both tax returns as filed.

$400 came from the Making Work Pay Credit, however that was reflected in reduced withholding for most taxpayers.

The short answer is that you over-withheld by $1,600 in 2010 and only $556 in 2011. But without all of the numbers in front of me, I can't be more specific.

Edit: Again, without seeing ALL of the numbers, there's no way to say.
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