Why is My Tax Refund So Low Compared to Prior Years

This article was last updated on February 23

A lot of people have started getting their tax refunds based on the latest IRS schedule. But one question that keeps coming up is why is it so low? Or more precisely why is the refund payment so much lower than expected compared to past years. In fact the IRS has published figures that refunds are down 8% to 10% from prior years.

One significant reason for this is the new tax laws and reforms that took effect last year which cut several popular deductions (e.g. state and local taxes capping at $10,000) for a number of Americans.

Other reasons for smaller refunds can be attributed to various causes related to your income, tax rate and number of withholdings claimed via your W4. Here is a sampling of scenarios based on actual reader comments that could be causing your refund to be much lower than you expected. If you have encountered a time when your refund was lower than expected feel free to leave a comment describing your scenario and I will assess your situation (no private details like SSN or DOB please).

Scenario 1 (multiple jobs): Mary is a single person and in the past has always gotten a large refund back. However this year, Turbo Tax showed she was due a $400 tax refund. But Mary made way more last year than ever having worked for two different companies. Mary made $15,000 at one job (tax withholding was ~$1200). At her other job she made $14,800 and had a similar withholding amount. So should she have got a larger refund since she made more money?

Answer: The reason Mary is getting a much smaller refund is that her tax withholding was much lower than it should have been since it was likely calculated for each job based on her salary being the annual amount.  That is one employer thinks she earned $15,000 and withheld taxes based on that annualized income. The other place thinks she earned $14,800 and withheld taxes based on that income. But Mary really earned $29,800 for the year and should have had more taxes withheld based on your total income. To fix this going forward she needs to adjust her W4 for the current tax year is she wants to get a larger refund the following year.

Scenario 2 (too few withholdings): I tried several tax software providers and they all come back with a federal refund of only a $95. This is the lowest I have ever got and I made the most money ever this year. I am single, own no property or anything, made around 14,000 last year ($590 federal withholdings). I claimed 2 deductions (withholding) on my paycheck as I have no dependents.

Answer: The answer for your lower refund is your deductions claimed via your W-4. Based on $14,000, your taxable income is around $4,850. Tax on that amount is $495 and with having $590 taking out, you’d get a $95 refund. You must have your deductions higher than 2 if you want more tax taken out so that you can get a higher refund next year.

Scenario 3 (making more money than last year, smaller refund):  Last year my wages were around $30,000 (withheld taxes of $2,240) and state income tax was $1,500. When I entered this info into TurboTax get a free refund estimate before filing, both of them showed my federal refund at $47.  However two years ago I made much less (around $22,000) and my return was almost $2000. What is going on? I am a single filer with no dependents and didn’t claim or get any other credits.

Answer:  The most likely reason for the smaller refund, despite the higher salary is that you are now in a higher tax bracket.  And you likely didn’t adjust your withholdings for the applicable tax year. To understand this you need to realize that your tax refund is determined by your total income, marginal tax rate and the amount of federal/state taxes that are withheld. So since your taxable income was higher you fell into a higher tax bracket that resulted in higher taxes. But you would have got more money on a weekly basis (due to your higher salary) as well – which is better than getting a larger refund in my opinion.

Refund Offset

Another reason why some folks refund is actually less than the amount they were expecting or provided by their e-filing tool is that the federal government has “offset” or deducted monies from your tax refund to cover debts you owe other federal agencies. Under the law, federal payments such as tax refunds can be collected against by approved agencies (e.g the IRS) before being paid to you. You will get  a letter from the IRS explaining this offset to your federal refund and why it differs from what was estimated in your filed return. They will give you an opportunity to dispute this collection, but you will have to prove you had no federal obligations. If you have questions regarding the offset of your refund you can call the Treasury Offset Program (TOP) on 800-304-3107.

At the end of the day getting a smaller refund with a higher income is not actually a bad thing in most cases. It basically means you didn’t give an interest free loan to the IRS (which is what a refund represents). In reality you don’t want a large refund as you should get the money in your pay check when you earn it. Not a year later.

62 thoughts on “Why is My Tax Refund So Low Compared to Prior Years

  1. Single
    1 dependent
    Income for the year 40k
    Federal return is 120.00

    I usually get over 3k refund
    Defintely didn’t see this 3k throughout the year either. I feel like I’ve been tricked.

  2. I am so confused. My income didn’t change in any significant way (a tiny pay raise at my part time job maybe a couple hundred dollars difference for the whole year). I even elected to have extra state withheld because I ended up owing last year (my part time job wasn’t taking out for state, but my full time job was, so I had them take out extra to cover the part time job income). I usually would get somewhere between 900-1200 back from federal but this year I am only getting like $200 and still owe state even though I have had double the extra taken out all year to go toward state. I didn’t get a pay raise or anything at my full time job. So I don’t understand why my refund is a third or less of what it usually is. Basically after I use my federal refund to pay off state, I don’t get one… I am single, and have no dependents and don’t claim any credits. I do work two jobs, but they don’t add up to much and I still make less than $30,000/year. Someone please explain how this works!

  3. I’ve worked for 3 years only making minimum wages part time, because I receive ssdi. So my in come could not exceed 1200. Per month & I always made sure I was under. Each year I’ve been able to make a little more per ss guidelines. Past 2 years I’ve gotten over 400 back in federal. This year AARP again did my taxes but I’m only getting 50.00 back . They have already sent them out. How can I recheck or calculate?

  4. Ripped off again… this standard deduction is good for who? The Government. I an single mother , 18 year old college student living at home and made substantially less than last year and my projected refund is over 900 dollars less. I depend on that refund.

  5. All my info is as above–no changes, lower refund. However, there was more in each monthly paycheck. Prob is, I don’t know exactly how much more — (also had yearly raises for both of us–don’t know if that affected tax bracket)…seems like it was around 50-100 a month more, which would make the refund 600 less (if 50) to 1200 less, about what it prob was.

    It reads like the people complaining below don’t know if their situation is like ours — have you all tried comparing the increase in your monthly take-home? Because, as I pointed out above, I can pretty well figure it was between 600 and 1200 less on my refund and sure enough — that much more came on the checks, when you multiply the higher amt each payday check by 12 months.

    No one mentioned comparing the figures to see if the loss on the refund equaled the raise on their paychecks — and a few put in some juvenile, personal remarks about the president ( name-calling ). Hate to point this out, but that is what poker players call a “tell” — when you name-call and don’t seem to know that the standard deduction was DOUBLED (I’m not even mentioning child care — no kids), it’s like you’re telling the world that your real problem is with your candidate losing the election in 2016.

    Again, your personal standard deduction– the amount you keep that is NOT taxed — was doubled this year – If you’re married, each person’s deduction was doubled. That means twice as much was not taxed — was not withheld each month — was yours to keep, so it naturally showed on your paycheck, not your return. No one mentioned that, like “I can’t figure out why it could be lower when the standard deduction was doubled,” so I have a feeling lots don’t know it. They just know they “hate” someone they have never met, who, by the way, is donating his salary to a different branch of the government every month.

    But if you’re not name-calling and have checked your figures, sit down and try to figure how the amt not taxed under this new plan is twice as much (yours to keep, not withheld and given back in a refund) –could possibly “make” you end up with less. Do the math — it’s not possible to be paying more in taxes if all you take is the standard deduction, because any other deductions don’t affect you that could possibly have been taking away, don’t affect you because take the standard instead of itemizing — and not that it’s twice as much, most middle-class people don’t itemize.

    1. Yeah sorry. The extra $20-30 I saw on my checks doesn’t add up to the $1600 I owe the Fed this year or the $1300 I owed last year. I claim 1 exemption on on my W4 (at the advise of an IRS employee that told me if I claim 1 I will never owe Federal taxes at the end of the year but also will never overpay) and have for at least the last decade and always got a small to mediuim refund, but somehow after the new tax laws came into affect I owe money instead of getting a refund. Explain to me how that works Einstein?

      1. To add to this, this year my wife made $6000 more than me and paid $500 more in Federal taxes than I did, but somehow I owe $1600 to the Fed and she was due a refund of ~$850. Which offset my debt so we end up owing ~$825 to the Fed when all is said and done. How does that work? You seem to have all the answers, so let’s hear it?

    2. Lmaoooo I hope you’re not referring to the orange Cheeto that has been scamming his way out of paying his fair share of taxes for decades. Keep drinking the Koolaid.

      1. At least while that orange cheeto was in office I got a good tax refund.

  6. When I filed last year for 2018, I only worked 4 months out of the year claiming one dependent and m y refund was $5400. This year, 2019, I worked a total of 9 months, claiming one dependent, and my estimated refund would be about $3800. Why would my refund be higher for last year if I made less money than this year?

  7. OMG, same here! I thought I was doing something wrong when doing my taxes.
    I just don’t understand, then you have these lazy people with a gaggles of kids that get 13-15 thousand back every year because they are below the poverty line and have kids they can’t afford. Some of them get returns more than what they made the previous year.

  8. Wages are not going up, it’s a scam. I’ve been working over 5 years as a contractor for a top-100 company, it was supposed to be a contract-to-hire position, management changed several times, my salary didn’t even get inflation correction. And I’m practically managing others. It’s only good for huge employers. My wife’s income increased last year because she is in a better job after applying for a position requiring extra college courses to get licensed, meaning we’re paying for more college loans. Although we’ve paid more federal taxes due to the extra income, we are getting $1600 less in our return. We didn’t change tax brackets and mostly all is the same from the previous year, so it can only mean our “great” government is doing what it can to get our money and never return it. Judging by all the other comments, I’m obviously accompanied by a lot of voters with their minds set on stopping the nonsense and bringing this country to an intelligent state again. I can imagine how good less money in the pocket will be for the economy, but then it’s never been so good. Right?


  10. My refund is down 50-60% from what it would have been. I had major legal fees from a divorce that was not my choice. That deduction is gone. Congress may have been trying to punish personal injury lawyers, but this change hits everyone who has been forced to pay a lawyer.

    For 2 years, I have supported my nephew and his mother in my house – and my brother, too, for several months of that time – paying all the bills, with erratic, inadequate contributions from my brother. The tax code WAS designed to support my effort. I had over $15,000 in state income and property taxes – which pay for my nephew to go to school – and over $5000 of that deduction is gone.

    The miscellaneous deduction over 2% of AGI is gone, so job expense deductions are gone, unless you can claim partial self employment and move them there. I am surprised that Trump signed this, because it seems that through the TCJA, Congress was trying to make him look like he reneged on his campaign promises.

  11. I don’t understand why we went from around $9000 back to $900. We did not change any deductions from last year. We claimed 0 both years. There was no significant wage change from either my wife or myself. So it looks as though we just gave the government $8000 free and clear. That work out to a 90% decrease far higher than the 5-10% that the IRS is stating

    1. Exactly the same happened to Me and my wife as well. Went from 8500-9000 down to 1200 this year. Total BS.

    2. Same here, wife and I have gotten back between 3-4000 every year now for the last 5 years. This year…$500. Nothing has changed in our circumstances. Something’s fishy

  12. I agree totally with you all. We made considerably less this year. All mairriage and new home owner exemptions, gone. All credits, gone. Donations, gone. If you didn’t put 24,000 into your house or subsequent assets…you get nothing. What is truly the saddest is that this is a situation where people who voted for a person who promise better has lied and padded the pockets of everyone (including himself) handsomely. Last year we did work on our home. And both went to school. While working full time. Our return last year helped about half of what we spent just on the house. We have been doing more and still furthering ourselves and working. All breaks are gone. We now have a child on the way and owe now. Not to mention that the city deemed our home 40,000 dollars more than the last years estimate due to the area so we get to pay taxes on a house that has had INTERIOR aesthetics done to the tune of a 40,000 difference in one year?? My payments just went way up due to this and all I’ve been told is I can contest it. Really?

    Store owner just decides your wage is too high and just docks you a third of your wage.” If you want to contest it, here is where you go. Good luck. Btw you’re fired for asking questions. “

    1. Property tax assessments can be disputed during what I am going to say is the open dispute month. In ohio it is March of every year. It is a small window so do it now. Go up to the county auditor or treasurer office and tell them you want to contest your property taxes.ask for the form. Read the papers then I would recommend hiring an attorney for ABOUT$250 To do it for you.

  13. Getting $6,000 less from our refund compare to last year. 0 claim on w-4, mortgage, daycare 3 kids. In comparison from last year yes we paid $2k on taxes last year. If you take that $2k out of the $6k we are are still $4k less on our refund compare to last year tax

  14. My 19 year old daughter attends Eastern Michigan university part time and lives in Cincinnati Ohio and she has a part time job in Ohio and Michigan,12,000 in scholarships and this year when she filed her taxes she’s only getting back a little over 500 but last year she’s received about 1400 and i don’t understand why .

  15. I made the same amount as last year and same withholdings and single, own same home— everything the same and yet I got $5500 last year and I am being told I owe $1300. I have always claimed 5/ single. For some reason my employer took out way less federal taxes on my W2? Why??? Even my accountant is asking me did you claim exempt? No! Nothing has changed…..

    1. The changes in the tax laws that President Trump signed was implemented last year. This in turn changed the tax tables the employers can use therefore lowering the deduction amounts so you would have more money in each paycheck instead of in a one time refund at tax time like we were all do used to. Sometimes a plus ends up as a minus down the road

  16. I am on Social Security (I am over 80 years old) and have a very small pension and miniscule interest income (less than $100 total). I am just getting ready to file my taxes and see that my tax refund is going to be over $100 less than last year. It does, certainly, seem that this tax cut is not helping those of us on low fixed incomes along with hardworking folks with families whose incomes are NOT in the hundreds of thousand dollars per year. What lies they fed the people on the bottom rungs of the financial ladder – this is more than shameful, .

  17. wake up you get more in you pay check. put it in your 401 k and make 5 to 6 percent a month

  18. I’m on security and my husband pension.Everything is the same from last year and I received 3500,this year it’s only 569,why !!!!

  19. What a joke. What happened to last year when Trump said we were getting tax breaks. I go from a refund to owing. Sounds like propaganda to me. What a friggin joke

  20. In 2018, i paid double the amount of taxes from the year prior. I went from having 1 child, to 2 children. And i recieved the same refund back while staying in the same tax bracket.

  21. Both my husband and I claim single 0. Jobs are the same, income went up a couple thousand but did not put us in a higher tax bracket. Have a college student and received a $6,000 tax refund last year. OWE $2,000 this year WTF!!!!!!

  22. I keep hearing that child tax credits should increase my refund, but my return was substantially lower than it has been in years. My income is about the same and the 2 children I claim are the same, but my return was cut nearly in half

    1. I have 5 children, 4 of which are in school and I pay crazy amounts per year for their educational expenses etc. I didn’t qualify for anything and I actually made less this year versus last year. Interesting how that works.

  23. 2017 received $2800. Just did a draft for 2018 only $1100 as a single and if I try head of household only a return of $800. I also have an additional $50 per pay taken out. So if I didn’t do that I guess I would receive nothong. Thanks Dumpf. Make America Pissed Off Again.

  24. I support Trump and am a very conservative Republican. But I did nothing different this year and have worked for the same company for 11 years. I only got a slight raise in 2018 over 2017. I’m a homeowner but don’t have any stock or any extra income. Yet my federal return is only $97 this year compared to an average of $800.00 in recent years. I truly don’t understand the new tax situation. In years past I always itemized because I give donations to charity and church and could deduct things like my mortgage interest and car tags. This year I couldn’t itemize because my deductions will never exceed the new $12,000 personal deduction. Like most middle class people, I look forward to getting a tax refund. I use the money to do home repairs and improvements, so this is very disappointing. I’ve now updated my W4 and am taking out an extra $10 each paycheck so I don’t end up owing next year.

  25. 2018. Married filing jointly with a mortgage, no kids, single earner… nothing has changed from prior year other than making slightly more (annual raise/increase).
    Last year’s standard deduction was 12,7000… this year its 24,000.
    My tax return this year is $500 less than last year.

    Which isn’t horrible, I see others have it way worse.

    I was trying my best to compare last year’s form to this years and the one major thing I noticed is last year they calculated some exemption for myself and my wife? I don’t fully understand it. It basically calculate some value against 2 people (myself and my wife), resulting in some $8K exemptions.

    This year’s form has no such entries at all.

  26. Got 787 last year. Getting 79 this year. Pathetic. So who is getting my extra money? I rely on that money every year.

  27. I was telling all my Trump friends to wait until they filed their 2018 taxes before they could tell me how great the Trump tax cut was. They all seemed to notice that their take home pay was larger and none of them got a pay raise from their employer. Pay me now or pay me later.

  28. Compared to my previous years of consistent employment, this year stuck out because I was eager for the return, as nothing had changed financially, yet something HAD changed….and we’re not told correctly, because my refund was 2% of my previous tax refunds. 2%
    Not 50%, or 20%, or even 10%.


    Just crazy

  29. Is any part of Trump’s new Tax “Reform” bill causing refunds being so much lower than previous years? Has it gone into effect for this tax cycle?

  30. Single, head of household, 1 child dependent. My refund is FIVE. HUNDRED. DOLLARS. I have NEVER received this little in my life. Always been around 2-3,000. My lovely payroll woman at work has claimed it’s due to me filling out 6 exemptions on my W4, however I’ve had those on there since I begun this job in 2016 (Never didn’t fill them out because I’ve always filled them out so I’d get more on my paycheck and STILL received a reasonable refund) and my 2016 taxes were fine, over $2,500 as expected. WHAT is going on?

  31. I always purposely have the most I can taken out of my pay so when I get my refund I can afford a down payment or the like.(I don’t have a place) 2 years ago I was at a company and made about $28000 no deductions. When I did my taxes I only got 1300 combined because I worked a ton of untaxed OT. I have a new job and did the same exact thing and made the same money but all the OT was taxed. Got 700 this time…
    I read that it was because I should have paid around 6500 in taxes and I actually paid around 7200…why should I had paid over 22% in taxes.( I got 600 last year and made 8000.) Confusion.

  32. Claim 0 on W4, take an extra $20.00 out….previous years received approximately $2,000 refund. In 2018, refund is $205.00.

    Filing married.

    Something is not right.

    Working very hard and taking out the most possible amount of money and then only get a small amount?


    Hoping we get a surprise check in the mail from our government to offset.

    Hey, we can dream.

  33. Hello…Yes I am very upset that my refund is less then half from last year. What is going on? You can’t claim your 17 year old who is in school anymore??? What is this? Please explain as we work hard for our money and need a good refund to fill in the cracks.

  34. I’m seeing $2200 dollar reduction eventhough I earned the same amount as prior year.. None of my deductions or amount of dependents changed.. something is different..

    1. This is my exact situation and I can’t find an explanation anywhere. I thought we would not see any changes in 2017 and the change would come in 2018. Now I am scared to see what 2018 will bring!! Maybe no refund or having to pay?!

  35. I just filed my tax’s and I’m only on Social Security and I do get my pension and all I have for a refund is my state and this year is so low,last year I got $224 back on my state refund and this year is only $15 dollars. Talk about nothing ,that is a waste of paper to file it. I hate Trump for this, him and is so called republicans they now are more richer and the low low income citizens just got poorer. I thought this new tax bracket was to help us but it was just to get him more richer and our deficit is higher than any president we had. I just hate Trump.

  36. Having the same issue. Income same as last year as well as deductions. Federal, and resident state refund remains the same, but my nonresident return to a neighboring state is $600 less than last year

  37. Trump enjoys showering with the taxpayers money and after it touches his orange body it is burned and disposed ofso no Republicans go dictatorship go f*** yourself 20018 20000 billion 19 Trump forever ever ever

  38. Head of household 2 dependents and only made 15625 dollar whole year with 734 fed withholding why is my income tax this year under 3000 and last year it was 8338 dollars and nothing changed?

  39. Wondering why my refund is more than 2000 dollars less this year despite my income being almost exactly as it was last year. $26,500 income, 2 dependents, filing HoH. got 8100 combined last year, this year its saying i will get only 5900 combined. same W-4 as previous year. Can you explain why?

    1. I have gotten around $3,600 in the past. This year it’s saying I’m getting $1,000. I also made $6,000 less this year (22k) after my company merged with another. Not sure why the president claims that wages are going up not mine at least. it just sucks when you count on this money and pretty much is stolen from u.

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