Why did my tax refund go down so much for 2025 filing season?

Thanks for explaining! I just checked my pay stubs like you suggested, and you're right - I am bringing home about $45 more per paycheck than last year. That would add up to around $1,170 over the year, which is pretty close to the difference in my refund. I guess I was just thinking of that big refund as a savings account and didn't notice the small increases in my checks. Is there any way I can adjust things so I get a bigger refund next year? I know it sounds weird but getting that lump sum helped me save in a way I struggle to do with small amounts in my regular checks.

You can definitely adjust your withholding to get a larger refund next year. The simplest way is to fill out a new W-4 form with your employer and request additional withholding. There's a specific line on the W-4 where you can request a fixed dollar amount to be withheld from each paycheck beyond the standard calculation. For example, if you want about $1,500 more in your refund next year, you could request an additional $60 withheld from each biweekly paycheck. Just remember that this is essentially giving the government an interest-free loan, but if it helps you with forced savings, many people find that valuable enough to do it.

Does it actually work with all tax forms? I've got W-2s plus some 1099s from freelance work and a bunch of investment documents. Would it help me figure out why my refund changed too?

I'm kinda skeptical about these tax tools. How much does it cost? And is it really any better than just going through the comparison screen on TurboTax or H&R Block?

It works with pretty much all tax forms including W-2s, 1099s, 1098s, and investment documents. It's especially helpful with complicated situations like yours with multiple income sources because it breaks down each form's impact on your taxes. The difference from TurboTax's comparison is that it analyzes the actual documents rather than just the final numbers. It shows line-by-line changes and explains what each change means for your refund in plain language. I found it much more detailed than the basic comparisons in tax software, plus it gave me specific recommendations I could use for next year.

Wait, how does this actually work? Do they have some special connection to the IRS or something? I've literally spent entire afternoons on hold with the IRS only to have the call drop.

Sorry but this sounds like BS. Nobody can magically skip the IRS queue. They probably just put you on a callback list which the IRS already offers for free. Why would anyone pay for something the IRS already provides?

They don't have any special connection to the IRS - they use technology to wait on hold for you. Their system calls the IRS, navigates through all the prompts, and stays on hold (sometimes for hours). When an actual IRS agent picks up, their system calls your phone and connects you directly to that agent. They're essentially taking the hold time burden off you. It's different from the IRS callback system because the IRS doesn't offer callbacks for many of their departments, and even when they do, they often reach capacity early in the day. With Claimyr, you can request a call to any IRS department any time. I was honestly amazed when my phone rang and there was an actual IRS agent already on the line - saved me about 3 hours of hold time.

I don't think I received any special credits last year - I don't have kids and didn't qualify for most of those pandemic-related things. My income did go up slightly (about $1,500 more than last year), but I didn't think that would make such a big difference. One thing I'm wondering about - I did start contributing to my company's 401k this past September. Would that affect my refund in any way? I'm putting in about 4% of my paycheck.

Your 401k contributions actually should have helped your tax situation, not hurt it. Those contributions reduce your taxable income, which typically means less tax overall. Since you started in September, you might not see the full annual benefit, but it definitely wouldn't cause your refund to decrease. Given all the information you've shared, it really does sound like the withholding change is the primary factor. The good news is that you didn't actually lose money - you just received it gradually throughout the year instead of in one lump sum. For next year, definitely submit a new W-4 requesting additional withholding if you prefer the larger refund approach to saving.

This is exactly right. A tax refund is just the government giving back money they took too much of during the year. Ideally, your refund should be close to zero - that means you paid exactly what you owed, no more no less.