I added my W2, it said my refund was around $7k. Then I added my second W2 and it lowered my refund to $3k, despite earning the whole $4k child tax credit. Why? (2024)

FAQs

I added my W2, it said my refund was around $7k. Then I added my second W2 and it lowered my refund to $3k, despite earning the whole $4k child tax credit. Why? ›

When you added more income, your tax liability increased, so you saw your refund decrease. The program began by giving you your standard deduction—- which lowered your taxable income. So you are not being taxed on as much of the income on that first W-2. Then you added taxable income--so the refund went down.

Your refund meter changes as your numbers change. When you enter a second W-2, you add more income. Generally, more income means more taxes.

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

Common reasons include changes to a tax return or a payment of past due federal or state debts.

The IRS will reconcile filed returns with remainder of the credit claimed on your return before they accept and issue the refund. If you have not entered in the aggregated amount of advanced payments received correctly, the IRS will make the adjustment based on their system and send you a notice.

Treasury offset adjustment

Different federal and state agencies, such as the Department of Education and the Office of Child Support Services, submit delinquent debts that need to be collected. These debts are then paid off with tax refunds, which results in a lower tax refund amount.

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.

Having multiple W-2s affects your tax return in the sense that you'll have more information to enter when it's time to file. More income to report could also mean paying more taxes if you end up in a higher tax bracket.

Use Form 1040-X to correct any previously filed 1040. Keep in mind that Form 1040-X cannot be filed electronically; amended returns must be mailed to the IRS. Check the Form 1040-X instructions for your state's IRS Service Center address where you will mail the amended return.

Federal tax withholding

If you earn less (such as work fewer hours or increase contributions to your 401k), the FITW will decrease. Your employer sends the federal income tax withholding to the IRS on your behalf.

Why did I only get part of my tax refund? ›

All or part of your refund may be offset to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans.

How can we help? If your refund was less than you expected, it may have been reduced by the IRS or a Financial Management Service (FMS) to pay past-due child support, federal agency nontax debts, state income tax obligations, or unemployment compensation debts owed to a state.

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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.

Answer: Contact an IRS customer service representative to correct any agency errors by calling 800-829-1040 (see telephone assistance for hours of operation). Unfortunately, this may result in you receiving a paper check.

When the amount of the refund (paper check or direct deposit) is different than what was expected, indicating the IRS changed the amount, a notice explaining the adjustment is mailed to your address of record. Please review the information in the notice to determine if the change to the refund is correct.

SACRAMENTO, Calif. — Some people received refund checks from the IRS even though they were told they owed them money. Is it simply just a nice surprise or a mistake? One tax expert says it could be the result of an error in completing the return, so the IRS corrected it and sent a refund.

Why is that? Generally, this happens when certain credits are involved - most commonly the Earned Income Credit (EIC). At certain income levels, the amount of EIC will fall as your income decreases. So, with each business expense, you are reducing your taxable income, which will then reduce the amount of your EIC.

So, while you may file or submit your tax return twice, only one return will be accepted by the IRS. Therefore, you may submit duplicate tax returns, but only one will actually be accepted and filed.

As higher incomes fall into higher tax brackets, the breakpoints on a joint return aren't quite double as the level on a Single status return. If the spouses' incomes are unequal, it is possible that combining them on a joint return will pull some of the higher-earner's income into a lower tax bracket.