Why is my tax return so much less this year?

[mciarametaro]

Any ideas as to why our tax refund is dramatically less this year? From over $3,000.00 down to $500?

[xmasbaby0]

We cannot see your screen, your return or your account.  Have you entered ALL of your 2024 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.

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/turbotax-support/en-us/help-article/tax-refund/refund-go-compared-last-year/...

Print out 2023  and 2024  and compare them side by side to see what is different. 

https://turbotax.intuit.com/tax-tips/tax-payments/video-why-would-i-owe-federal-taxes/L3VXudPiN

[Vanessa A]

Did you double check your entries to be sure you have no errors on your withholdings or income?  This is always the best place to start if something seems off on your return.

Did you have a child that turned 17 in 2024?  If so, your child tax credit would drop from $2,000 to $500 for the Other Dependent Credit and the $500 is not refundable so if you did not have any tax liability, you would lose the entire $2,000. 

Has something else changed?  Did you make more money this year? And increase in income can cause your tax liability to increase leaving you with less of a refund. 

The best way to figure out why your refund is so much less this year is to compare you last years return to this years return. If you compare it line by line you will be able to see where the change was made. Then if this makes sense, then you will understand what the difference is from.  If it does not, then you can go back to that section of TurboTax and fix your entries as long as you have not yet submitted your return.  If you did submit your return, you would need to  Amend Your Return in order to make any changes.  However, do not amend your return until your original return is fully processed.