Question

Why is my IRS refund amount so different in comparison to last year?

Answer

Many factors can affect the refund amount you’re entitled to each year and result in a lower refund than you might have anticipated. When attempting to understand changes to tax refund from a prior year, look at your returns line-by-line to find out what might have contributed to the refund changes. These factors include:

  • Deductions or adjustments you claimed last year but weren’t able to claim this year for various reasons
  • Changes in your income. (An increase or decrease might affect your eligibility for certain credits as well as your overall tax bracket.)
  • Changes in federal income tax withholding. This could be due to a change in your income, your W-4, or the way you earned the income like overtime or bonus money.
  • Self-employment income or losses and the associated taxes
  • Changes in distributions from your retirement account and the associated taxes and / or penalties
  • Changes in dependents you were able to claim could mean less refund
  • Changes in your filing status

—– Penalties for not having Minimum Essential Health Coverage or a Repayment of Excess Premium Tax Credit

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