Without examining your return, it's impossible to say exactly what caused
your personal exemption to decrease. However, there's a high probability that at least one
reason is listed below.
If your refund is wildly off, it's possible you simply mistyped a dollar
amount somewhere. An extra digit here, a missing number there, even something
as seemingly insignificant as a misplaced decimal point can have an eye-popping
effect on your TurboTax refund.
Changes in your income or tax rate
- You (or
your spouse) took on an additional job (especially non-wage income which
is taxed at the higher self-employment tax rate);
- Your
salary or wages increased but your W-4 stayed the same;
- You sold
investments but didn't take out any taxes from the sale;
- Your
filing status changed from last year;
- You
started receiving Social Security benefits or Roth IRA distributions;
- You
received taxable unemployment income;
- You
had gambling winnings;
- You're paying a penalty for not having health insurance
coverage in 2016.
Loss of credits or deductions
- Your child
turned 17 in 2016, causing you to lose the $1,000 Child Tax Credit;
- Your child
turned 19 in 2016 (or 24, if a full-time student) and no longer qualifies
as a dependent;
- You paid
off your mortgage and can no longer deduct mortgage interest;
- You took
the itemized deduction last year (for example because of high medical
bills) but got the standard deduction this year;
- You didn't
qualify for the Earned Income Credit this year;
- You paid
off your student loan and can no longer deduct the
interest;
- You're no
longer eligible for certain education credits (or you took a different credit
this year)
- You didn't
contribute to a Traditional IRA (or couldn't take the full deduction
because your income was too high).
