Without examining your return, it's impossible to say exactly what caused your refund to show you owing over $7,000. 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.
- 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.
- 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).