If i made more money than previous year does that make my refund go down this year?

Forum|Forum|7 years ago
May 30, 2019
3 replies
2 views

I noticed I got 8k last year and this year only 6k. Is that due to making more money?

Hal_Al

Level 15

Yes. The biggest part of that refund is the Earned Income Credit (EIC). The basic EIC works on a "bell curve," rising as a worker's wages rise reaching a maximum when annual earnings are between $13,650 and $17850 (Single with 2 or 3 children 2014) and then declining gradually until it phases out altogether. If your income is on the up slope of the EIC curve more earned income will increase your EIC but if your income is on the down slope, more income (of any kind) will reduce you EIC.

http://www.taxpolicycenter.org/briefing-book/key-elements/family/eitc.cfm

Opus 17

Level 15

If you have not been receiving EIC, more income can still lower your refund depending on your withholding. A refund is the balance left over after you compare the amount withheld for taxes with the amount you actually owe. Sometimes when you get a raise or change jobs, your withholding might not keep up with your wages. This is especially true if you have two jobs, since the withholding system is not very smart and will under-withhold if you have two jobs, unless you make special adjustments to your withholding.

bighawk1

Level 2

The answer is twofold. Not only did you make more money, but perhaps you have less deductions. Did exemptions change? Also, to insure a greater refund, you can have an additional amount with held from each pay check. Ask your employers hr. Dept. On how to go about this

Sharic-Padgitt

Level 2

Good Morning yes it will make it go down also depending on the age bracket if you have children all of these things play a big factor in your refund amount. I hope this helps you