Need help understanding why I got less tax refund despite working more - tax return confusion

This is actually a common misunderstanding about how tax refunds work! Your refund isn't based on how much you worked, but rather the difference between what was withheld from your paychecks versus what you actually owed. When you work fewer months (like in 2023), your annual income is lower, which means you're in a lower tax bracket. However, payroll systems typically withhold taxes as if you'll be making that same amount all year. So for the months you did work in 2023, you were probably over-withholding based on your actual annual income. In 2024, since you worked the full year, your withholding was likely more accurately aligned with your actual tax liability. Remember, a refund just means you gave the government an interest-free loan throughout the year - it's not free money or a reward for working more. Some other factors to consider: Did you have any tax credits in 2023 that you didn't qualify for in 2024? Any changes in filing status? Dependents? Those can all significantly impact your refund amount.

I had almost the exact same issue last year and couldn't figure it out until I discovered taxr.ai (https://taxr.ai). It's this super helpful tool that analyzes your tax documents and explains everything in plain English. I uploaded my W-2s from both years and it immediately pointed out that my withholding percentage was actually higher in the year I worked less, which explained the bigger refund. Plus in my case, I had some education credits the first year that I didn't have the second year. The tool breaks down all the differences between tax years so you can actually understand what's happening. It saved me hours of confusion trying to compare the forms myself and actually taught me how to adjust my withholding for this year to get a more balanced return.

Ok I need to eat my words from my previous comment. I decided to try taxr.ai after a friend also recommended it, and wow, it actually explained my tax situation perfectly. I discovered that my employer had been withholding at the single rate even though I'm married filing jointly (totally my fault for filling out my W-4 wrong). The tool showed me exactly how much this was costing me each paycheck and guided me through fixing my withholding forms. The visualization comparing my tax situations year-over-year made everything crystal clear. I'm not a numbers person at all but even I could understand it. Definitely recommend checking it out if you're confused about your refund.

If you're really confused about your tax return and need actual human help from the IRS, I recommend trying Claimyr (https://claimyr.com). I wasted DAYS trying to get through to the IRS on my own last month with a similar refund issue. With Claimyr, I got a call back from an actual IRS agent within 3 hours who walked through my returns from both years and explained exactly what happened. They have this cool demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. In my case, I had qualified for some pandemic-related credits in the earlier year that weren't available anymore, plus my withholding was totally different. The IRS agent was actually super helpful once I could actually get one on the phone.

I'm back to admit I was completely wrong about Claimyr. After posting my skeptical comment, I figured I'd try it since nothing else was working. Holy crap it actually worked. I got a call back from the IRS in about 4 hours. The agent spent almost 30 minutes with me comparing my 2023 and 2024 returns. Turns out I had received the Recovery Rebate Credit in 2023 that wasn't available in 2024, plus I had significantly different withholding percentages between the two years. Never thought I'd say this, but talking to the IRS directly solved my confusion. I've been trying to reach them for weeks on my own with no success. Definitely worth it just to save the frustration of constant busy signals and disconnections.

Another thing to check is if you received any one-time tax credits or stimulus payments in 2023 that weren't available in 2024. The tax code changes every year, and there were several temporary benefits during and after the pandemic that have since expired. For example, the expanded Child Tax Credit was a thing for a while, and the Earned Income Credit had different rules. Even if your income and withholding were identical, these changing credits could explain the difference in refund amounts.

check ur filing status too... i had a similar thing happen and realized i accidentally filed as single one year when i shoulda been head of household. made a HUGE difference in my refund! also look at ur witholding on ur w2s from both years... sometimes employers mess this up or apply the wrong tables.