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Hello so I have a wife and two kids so I get back a good amount every year but this past year my wife started working and my refund went down 6 thousand just would like to know why?

 
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3 Replies

Hello so I have a wife and two kids so I get back a good amount every year but this past year my wife started working and my refund went down 6 thousand just would like to know why?

More income = more tax

 

We cannot see your screen, your return or your account.  Have you entered ALL of your 2020 information?  All your income, etc.?  Many tax documents that you need do not arrive until late January or even February, so maybe you do not have it all there yet.

 

 

No one in this user forum can see your tax return or your screen.  There were major tax law changes that began with the 2018 tax year that seem to continue to surprise some people.  Personal exemptions of over $4000 per person were removed beginning with 2018 returns.

 

 Was something different for 2020?  Did you have less income due to the pandemic?  Did you receive unemployment compensation?  If so, did you have tax withheld from it?

 

There are a lot of variables that affect your refund or tax due including how much you earned, how much tax you had withheld, your filing status, the number of dependents you claim, your deductions and credits, etc.  You may have lost Earned Income Credit or the Child Tax Credit— did a child turn 17?  If you received the EIC last year, remember that changes in the amount you earn have a big effect on the amount of EIC you can get. (Sometimes earning more money means less EIC)  Are you 65 or older ?  If so, your standard deduction is higher. Everyone has a higher standard deduction now so it is harder to use itemized deductions.

 

 

And of course, always check your own data entries, looking for errors such as misplaced decimals or extra zeros.

 

https://ttlc.intuit.com/questions/1901008-why-did-my-refund-go-down-compared-to-last-year-s

 

Print out 2019 and 2020 and compare them side by side to see what is different.  The line numbers are different so it is tricky and you have to read them very carefully.

**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.**
AnnetteB6
Expert Alumni

Hello so I have a wife and two kids so I get back a good amount every year but this past year my wife started working and my refund went down 6 thousand just would like to know why?

First of all, be aware that no one answering the questions here can see your actual tax return or any of the information you have entered.  So, the answer provided is not specifically related to your return.

 

That being said, the most likely difference in your return from last year to this year is related to the additional income from your wife's working.  The additional income may have bumped you into a higher tax bracket or affected some credits you were claiming.  Earned Income Tax Credit, for example, reaches a certain point and then is reduced as income is increased.  

 

You did not mention how old your dependents are, but it is common for taxpayers to be unaware of the change in the child tax credit when a dependent turns 17 during the year.  The child tax credit (up to $2000) no longer applies and can make a big difference in the expected refund amounts.

 

@ryan-price2196

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Hal_Al
Level 15

Hello so I have a wife and two kids so I get back a good amount every year but this past year my wife started working and my refund went down 6 thousand just would like to know why?

 I suggest you lay last year's return next to this year's and do a line by line comparison to see what's changed. Usually the answer "jumps right out at ya".

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