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New Member
posted Feb 4, 2021 8:51:51 PM

Why am I receiving less money on my return this year, when I worked more and made more money over 2020? I never stopped working due to COVID-19. I got over $800 last year

I double checked everything, all my numbers match. I made more money in 2020 than 2019 but I got a better tax return for 2019. Why.?

0 3 391
3 Replies
Level 15
Feb 4, 2021 8:58:26 PM

In general, when you make more money you have to pay more tax. Compare your 2019 and 2020 tax returns line by line to see where the significant differences are. That will give you an idea of where to look to see why your refund is less this year. When you compare the two tax returns, the line numbers are different, so you will have to look at the descriptions of each line.

 

Level 15
Feb 4, 2021 9:31:00 PM

Specifically, IRS has changed the withholding formulas so that your refunds will be smaller.  That's probably the reason.

Level 3
Feb 4, 2021 9:38:48 PM

Making more money does not equal a higher refund.  I am not sure why in this day and age people STILL don't understand what a tax return is, and how a tax refund is a function of it. 

 

When you earn more money you pay higher tax rates, you are eligible for fewer credits, etc. but even that really doesn't have all that much to do with your refund.  Your refund is the amount of money you paid in that exceeds your liability.  If you had paid more, then you would get more of YOUR MONEY back when you reconcile your tax due with your pre-payments.