Does your income affect the refund. I am recieving...
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Does your income affect the refund. I am recieving much less of a return from last year. only making 30k more. Have 3 children

 
3 Replies
Level 15

Does your income affect the refund. I am recieving much less of a return from last year. only making 30k more. Have 3 children

$30,000 more?  That is a lot more.  Yes your income totally affects your refund.

 

One reason is the IRS changed the withholding tables so you got more in your checks during the year instead of a big refund. And there are other tax changes. And any dependents you have are a year older. If you made more income that can reduce some credits you got like the EIC.

Level 3

Does your income affect the refund. I am recieving much less of a return from last year. only making 30k more. Have 3 children

There is no formula for determining the refund from your income.  It depends on many factors.

 

Your refund is the difference between: 1) how much total tax you owe for the year and 2) how much withholding you had during the year.

 

A higher income will affect both of these factors.  You can also (somewhat) control how much withholding is taken out by submitting a W-4 to your employer.

 

Good news: a lower refund is considered better: it means that there was less withholding during the year, which means that you had the use of that money during the year instead of having to wait for it.  One strategy is to reduce your withholding so that you will have no refund, and then put the extra money in the bank.  When everyone else is anxiously waiting for their refund and getting refund-anticipation loans, you just go to the bank and withdraw your money.

Level 15

Does your income affect the refund. I am recieving much less of a return from last year. only making 30k more. Have 3 children

Of course your income affects your refund or tax due.  Thirty thousand more is a lot more income, and it would affect any earned income credit you may have received.

 

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

 

There are several child-related credits you *may* get if you have a dependent child and if you have income earned from working.The amount earned by working has a major effect on how much you receive for the child-related credits.

You might be getting the Child Tax Credit--that is not all a refund--it lowers the tax you owe, up to $2000 per child, but if you do not owe tax then you may not get the full amount of CTC.  In some cases, you could qualify for the "Additional Child Tax Credit" which is a refundable credit, and would increase your refund.  If you qualify for this credit, TurboTax calculates and automatically adds it to your refund.

You might be able to claim the child and dependent care credit if you paid someone to take care of your child so you could work. This is not a refundable credit, so it will not be in your refund.  It can lower the tax you owe.

You might qualify for Earned Income Credit, which is a refundable credit if you worked and earned income. The EIC is based on the amount you earned.  If you do qualify for EIC, TurboTax automatically calculates the amount and adds it to your refund.

 

Look at your 2019 Form 1040 to see the child-related credits you received

 

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

 

Child Tax Credit line 13a

Credit for Other Dependents line 13a

Earned Income Credit line 18a

Additional Child Tax Credit line 18b

Child and Dependent Care Credit line 18d

 

 

https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit

https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

https://ttlc.intuit.com/questions/1900643-what-is-the-child-and-dependent-care-credit

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
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