Why is my tax refund different than expected?
If you owe money to a federal or state agency, the federal government may use part or all of your federal tax refund to repay the debt. This is called a tax refund offset. If your tax refund is lower than you calculated, it may be due to a tax refund offset for an unpaid debt such as child support.
Different refund amount
Sometimes, you'll receive a refund that's either more or less than you expected. Common reasons include changes to a tax return or a payment of past due federal or state debts.
Changes in federal income tax withholding. This could be due to a change in your income, your W-4, or the way you earned the income like overtime or bonus money. Self-employment income or losses and the associated taxes. Changes in distributions from your retirement account and the associated taxes and / or penalties.
The agency will mail you a letter about the miscalculation along with a check for the difference. On the other hand, if the IRS overpays you, do not cash the check or use the money in your bank account: "Immediately contact the IRS at 800-829-1040 and your bank or financial institution," the agency says.
Offset letter
BFS will send you a letter explaining why your federal refund was reduced and that it may take several weeks before the federal refund reaches FTB. They will also send any remaining federal refund amount to you. To get a copy of your letter, contact us.
If you're planning to file your tax return soon and want your refund money as soon as possible, make sure you file electronically and set up direct deposit. It's a simple way to access your IRS money a few days or weeks sooner than if you depend on the mail to submit your taxes and receive your refund.
You can receive your refund earlier if you file electronically and request direct deposit, which the IRS prefers. The IRS has a tool called Where's My Refund? to allow taxpayers to track the status of their refunds.
When you pay your TurboTax fees with your federal refund, the TurboTax fee plus a separate Refund Processing Service (RPS) fee are deducted from your total refund amount. So your IRS-issued tax refund might be less than the amount shown in TurboTax.
There are lots of reasons why this might happen. In most cases, the IRS takes part of your refund to pay for outstanding government debts you might owe. These include: Overdue federal tax debts.
However, the size of the refund you receive depends on a wide range of factors. Things like how much money you earned, how much you paid into taxes and what expenses you faced throughout the year all play a role. Moreover, if you're a homeowner, you may be able to increase your tax return even further.
Can IRS send refund by mistake?
On some occasions, the IRS could find a mistake in your calculations, resulting in a larger return than you were expecting. But it typically will also send you a notice explaining why.
Refund less than expected
If you receive a refund for a smaller amount than you expected, you may cash the check. You'll get a notice explaining the difference. Follow the instructions on the notice. If it's determined that you should have received more, you will later receive a check for the difference.
You may be in line for a smaller tax refund this year if your income rose in 2023. Earning a lot of interest in a bank account could also lead to a smaller refund. A smaller refund isn't necessarily terrible, since it means you got paid sooner rather than loaning the IRS money for no good reason.
The average tax refund by year
According to the IRS filing-season statistics, the average tax refunds in the last five years have been: Tax year 2022—$2,753. Tax year 2021—$3,012. Tax year 2020—$2,865.
When you enter a second W-2, you add more income. Generally, more income means more taxes. Your new total income might be in a higher tax bracket. Your second W-2 could have pushed your total income into a higher tax bracket, making it taxed at a higher marginal rate.
The IRS can delay your tax refund until it completes any audits. This is most common when the IRS is conducting a mail audit on your EITC or ACTC return from a prior year. Normally, you'll receive IRS Letter CP88 indicating that your refund is frozen until the IRS completes the audit.
If you file a missing or late return, the IRS will process your returns and issue your refunds (generally within 90 days).
The exact day of the week that the IRS will deposit your refund into your account can vary, but they usually send the refund on every business day, from Monday to Friday.
Check the IRS refund schedule: Each tax season, the IRS publishes a refund schedule—your roadmap to when you can expect your refund. While the IRS doesn't guarantee refund dates, the published schedule is a reliable indicator of when you might receive your direct deposit or refund check.
If their refund status changes from “being processed” status to “still being processed” status, the issue detected in the tax forms was likely resolved and the refund may be released when it is approved for a future cycle date.
How accurate is TurboTax estimated refund?
100% Accurate Calculations Guarantee – Individual Returns: If you pay an IRS or state penalty or interest because of a TurboTax calculation error, we'll pay you the penalty and interest.
100% Accurate Expert-Approved Guarantee: If you pay an IRS or state penalty (or interest) because of an error that a TurboTax tax expert or CPA made while providing topic-specific tax advice, a section review, or acting as a signed preparer for your return, we'll pay you the penalty and interest.
Treasury Offset Adjustment
Different federal and state agencies, such as the Department of Education and child support, submit delinquent debts that need to be collected. These bills are then taken from tax refunds which lowers the tax refund amount deposited. However, not all bills are subject to a tax offset.
Taxpayers should make IRS.gov their first stop to get information on filing a tax return. There is information on Choosing a tax professional, IRS Free File, Answers to tax questions and Tips on filing a return. Taxpayers who file electronically and choose direct deposit typically get their refund in less than 21 days.
Why is my refund taking so long? A refund will take longer if you file by mail or don't select direct deposit. In addition, if the return is more complex or corrections are needed, it may slow the process down.
