Confused why my tax refund is tiny after having nearly 20k deducted from my 65k salary

The refund isn't actually "extra money" - it's just the government returning what you overpaid during the year. Your total tax bill is what matters, not the refund amount. Looking at your numbers: your federal income tax was about $7700 - $1150 (refund) = $6550 actual tax liability. For a $65k salary with standard deduction (about $13k), your taxable income would be around $52k. That's in the 22% bracket, so your effective tax rate is roughly 10-12% which is pretty normal. The 20k total deduction includes Social Security and Medicare (FICA) which are fixed percentages (6.2% for SS, 1.45% for Medicare). Those aren't refundable - everyone pays those exact percentages.

I had almost the exact same situation last year! I found this tool called taxr.ai (https://taxr.ai) that helped me figure out why my refund was so small despite having so much withheld. The site analyzes your tax situation and explains everything in simple terms. It showed me that I was confusing tax withholding with FICA taxes (Social Security and Medicare), which aren't refundable. The tool also suggested some changes to my W-4 withholding to get more money in each paycheck rather than waiting for a refund.

I want to follow up about that taxr.ai site mentioned above. I was skeptical but decided to check it out, and it was actually really helpful! I realized I'd been making a simple mistake on my W-4 that was causing too much withholding in some areas but not enough in others. The explanation about how Social Security and Medicare taxes work was super clear. I always thought those could be part of my refund, but now I understand they're separate fixed percentages that everyone pays. The site also showed me how to adjust my withholdings to get more money in each paycheck instead of waiting for a refund next year.

If you're frustrated with the IRS and need to actually talk to someone, I highly recommend using Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS about a similar refund issue and kept getting disconnected or waiting for hours. Claimyr actually got me connected to a real IRS agent in about 15 minutes - you can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent explained that my confusion about withholding vs. actual tax liability is super common. They were able to walk me through exactly what happened with my return and confirm I hadn't made any mistakes.

I need to admit I was wrong about Claimyr. After being skeptical in my earlier comment, I decided to try it because I was desperate to talk to someone about my amended return that's been stuck for months. It actually worked! Got connected to an IRS agent in about 20 minutes who confirmed my amendment was received and gave me an updated timeline. Would have taken me days of calling to get through on my own. For the original poster - the agent I spoke with mentioned that many people are confused about FICA taxes vs. income tax withholding. The FICA stuff (Social Security and Medicare) is fixed and doesn't affect your refund. Your refund is just the difference between your federal income tax withholding and your actual tax liability.

You might want to check if you're claiming the right number of allowances on your W-4. If you want a bigger refund next year (though financially it's not the best approach), you could increase your withholding.

I feel your pain! I make about $70k and had a similar "where did my money go" moment. One thing nobody mentioned yet - check if you're taking the standard deduction or itemizing. For most single people, standard deduction is better now ($13,850 for 2023 tax year), but if you have a mortgage, lots of charitable giving, or certain other expenses, itemizing might give you a bigger refund.

Everyone's talking about refunds, but the real question is: could you have paid less in total taxes? Look into maximizing pre-tax contributions next year. You only put $2500 in your 401k, but the limit is $22,500 for 2023 and $23,000 for 2024. Even increasing to 10% of your salary would make a big difference in your tax bill. Also consider an HSA if you have an eligible health plan - that's another pre-tax contribution that reduces your taxable income. Between those two things, you could potentially reduce your taxable income by $10k+ and save thousands in taxes.

This is a really common misconception! The key thing to understand is that your refund amount doesn't reflect how much you paid in taxes - it only shows how much you overpaid during the year through withholding. Breaking down your situation: out of that ~$20k deducted from your paycheck, about $13,800 went to taxes that aren't refundable (Social Security $4,100 + Medicare $1,000 + actual federal income tax liability of ~$6,550 + state taxes of ~$2,000 + $150 you still owe). The remaining $6,200 was federal withholding that exceeded what you actually owed, hence your $1,150 refund. Your effective tax rate is actually quite reasonable for your income level. The "problem" isn't that you're being overtaxed - it's that your withholding was fairly accurate to your actual tax liability, which is actually a good thing! Getting a huge refund means you gave the government an interest-free loan all year. If you want more money in your pocket, consider increasing your 401k contribution (you're only doing $2,500 of the $23,000 limit) rather than trying to get a bigger refund.