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June 1, 2019
Question

I earned more money this year but am receiving less in taxes.

  • June 1, 2019
  • 1 reply
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1 reply

Employee
June 1, 2019

Not unusual.  There are many reasons that could result in such a situation; and since this is a public forum you do not want to post your personal information.

The only way to find out is to do a side-by-side (line-by-line) comparison.  Compare each item (line-by-line) on your 2015 return (you do have a printed copy, right?) with the corresponding item on your 2016 return.


If you made more you will owe more, if your withholding was the same then your refund will be less.

If you were routinely getting a large refund (thousands of dollars), I would suggest that you are having WAY to much money withheld in the first place --the IRS requires that your withholding equals your anticipated tax bill. 

The ideal situation is to have EXACTLY the correct amount withheld ($0 owed and $0 refund).  Unfortunately that is a very difficult amount to predict, and is somewhat of a moving target due to salary increased/decreases and tax law changes. 

If you don't mind paying a tax bill to the IRS you could set your withholding (via W4) to be equal to, or little less than what you expect to owe  --but there is risk of being under withheld and incur an IRS penalty. 

Probably the better option is to have slightly more than your anticipated tax bill withheld and then you would get a small refund --the smaller the better since you will have then had the use of the money all year (not an interest free loan to the IRS).


https://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Question...
(Please note that the link may 'appear' to be truncated, however it will
work if you hover your mouse over the link you will see the full link.)


ellessecAuthor
June 1, 2019
Thank you, I will keep reviewing