Why am I getting less tax refunds this year than expected?

I'm seriously confused about my tax refund situation. For the past several years, I've been getting decent refunds (around $1,800-2,500) but this year it's only showing $673! I haven't changed jobs, still making roughly the same income as last year (about $56K), and my withholding status is exactly the same as before - single with 0 dependents. I double-checked all my W-2 info and everything seems correct. My federal withholding amount is actually a bit higher than last year. The only small difference I can think of is that I earned about $800 more in overtime, but that shouldn't make my refund drop by almost $1,500, right?? Has anyone else experienced this? Did something change with the tax tables for 2025 that I missed? Is the IRS keeping more of my money for some reason? I was counting on a bigger refund for some home repairs I've been putting off and now I'm really stuck. Any ideas what could be causing such a dramatic drop in my refund amount?

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18 comments

Malik Jenkins

•8M

Your situation is definitely puzzling but there are several common reasons why refunds can decrease significantly despite similar income. First, check if there were any changes to your tax credits or deductions. Many people who previously qualified for certain credits might find themselves ineligible this year, or the credit amounts might have changed. For example, some education credits or child tax credits have different phaseout thresholds. Second, look at your withholding carefully. Even with the same W-4 selections, the IRS withholding tables do get adjusted periodically, which means your employer might be withholding differently. This is actually designed to give you more accurate withholding throughout the year (less overwithholding), which means smaller refunds but more money in each paycheck. Third, that overtime income could push you into a different tax bracket for that portion of income, but you're right that $800 alone wouldn't cause such a dramatic drop.

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Malik Jenkins

•8M

If withholding tables changed to be more accurate, you might actually get slightly more in each paycheck because less tax is being withheld. This can be subtle - maybe $20-40 per paycheck that you might not have noticed, but over a year that adds up to $500-1000 less withholding, meaning a smaller refund. You can check this by comparing last year's W-2 Box 2 (Federal income tax withheld) to this year's. If the percentage of withholding compared to your total income is lower this year, that's your answer. You can also look at your final pay stubs from both years to see if there's a difference in withholding patterns.

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Eduardo Silva

•8M

I had the exact same problem last year and it was driving me crazy until I discovered taxr.ai (https://taxr.ai). I was comparing my returns side-by-side for hours trying to figure out what changed when a friend suggested this tool that compares your tax documents across years and pinpoints exactly what's different. I uploaded my W-2s and tax returns from both years, and it immediately highlighted that my employer had adjusted my withholding based on the updated IRS tables - exactly what the previous commenter mentioned. But there was also a tax credit I had qualified for previously that had phased out once my income crossed a certain threshold. Would have never caught that on my own!

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Eduardo Silva

•8M

Yes, it absolutely works for comparing different tax years - that's actually one of its main features. It can analyze returns from multiple years side by side and show exactly what changed and how it affected your bottom line. Super helpful for spotting trends or changes you might have missed. Regarding security, they use bank-level encryption and don't store your documents permanently. You can set documents to auto-delete after analysis, and they have a pretty comprehensive privacy policy that explains exactly how they handle your data. I was skeptical too initially, but their security credentials checked out when I researched them.

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Leila Haddad

•8M

Just wanted to follow up - I tried taxr.ai after seeing it mentioned here and it immediately solved my refund mystery! Turns out my employer DID change my withholding slightly (about $45 less per paycheck) which I totally missed, and I also lost eligibility for a credit I had last year. The comparison report was super clear and even explained the tax rule changes behind it. Saved me hours of frustration trying to figure it out myself! Definitely recommend if you're stuck comparing tax years like I was.

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Ravi Patel

•8M

If you want to get an actual answer from the IRS about why your refund changed so dramatically, good luck trying to reach them directly! I spent 3 weeks calling the IRS last month, just getting busy signals or disconnected after hours on hold. Then I found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in 45 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent was able to pull up both my returns and explain exactly why my refund was different this year - turns out there was an adjustment to my previous year's return that gave me a one-time larger refund that wouldn't apply this year. Without that explanation I would have been tearing my hair out comparing forms forever.

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Ravi Patel

•8M

It's not magic, just clever technology. They use an automated system that does the waiting for you by continuously calling the IRS using their algorithm until they get through. Then when they reach an agent, they connect you immediately. You don't have to sit on hold for hours - you just get a call when an agent is ready to talk. It's definitely not a scam. The IRS phone system is actually designed to hang up when call volumes are too high - Claimyr just keeps trying until they get past that initial barrier, then does the hold time for you. They can't change the IRS staffing issues, but they can handle the horrible phone system part so you don't have to.

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PixelPrincess

•8M

I need to apologize to everyone here. I was the skeptic about Claimyr above and I'm eating my words now. After posting that comment, I was so frustrated with my own tax situation that I decided to try it anyway as a last resort. I couldn't believe it, but I got a call back in about an hour with an actual IRS agent on the line. They explained that my refund decreased because I had a one-time adjustment on my previous return that artificially inflated that refund. This year's smaller refund is actually the correct normal amount I should expect going forward. Saved me so much stress knowing exactly what happened instead of just guessing. Sorry for doubting!

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Omar Farouk

•8M

That's likely a big part of it! If your withholding percentage dropped, that means more money in your paychecks throughout the year but a smaller refund at tax time. The IRS has been adjusting withholding tables to be more accurate, which means you're not giving the government as big of an "interest-free loan" through overwithholding. Rather than focusing on getting a big refund, you might want to consider setting up automatic transfers of a small amount from each paycheck to a savings account. That way you're saving the same amount but earning interest on it yourself instead of waiting for the IRS to return it.

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