Why is my tax refund from Amazon job so low compared to last year??
Title: Why is my tax refund from Amazon job so low compared to last year?? 1 I work at a fulfillment center and earned about 29k for 2024, but my refund is only $56??? Last year in 2023 I made like 14k and got back almost $950?? This makes absolutely no sense to me. I'm 23 years old and this is only my fourth time filing taxes, but I'm seriously confused. I use the same tax software every year and didn't change anything about how I file. I claimed 0 on my W-4 both years so I should be getting more back, not less! I'm just not understanding why the hell my refund dropped so much when I'm still in the same tax bracket. Anyone else experiencing this or know what could have happened??
18 comments
Join the conversation
Pedro Sawyer
15 This actually happens pretty often! The refund amount isn't just about how much you earned, but about the relationship between what was withheld from your checks throughout the year and what you actually owed. When you earned 14k in 2023, you probably had more withheld proportionally than was needed for your tax liability. But at 29k this year, a few things might have happened: 1) Your withholding might not have scaled correctly with your higher income, 2) You might have hit a threshold where certain credits phase out, or 3) There might have been changes to your W-4 that you didn't notice. The best way to understand this is to compare the actual tax owed (not the refund) between both years, and also compare how much was withheld. The refund is just the difference between those two numbers.
0 coins
Pedro Sawyer
•7 But wouldn't claiming 0 on the W-4 mean MORE tax is taken out, not less? I've always been told to claim 0 if you want a bigger refund. I'm confused about why earning more would mean a smaller refund?
0 coins
Pedro Sawyer
•15 The old W-4 system with "allowances" where you could claim "0" changed in 2020. The new W-4 doesn't use numbers anymore but instead asks for specific dollar amounts and situations. So if you're still thinking in terms of claiming "0," there might be a disconnect in how your withholding was calculated. With higher income, the withholding system sometimes becomes more accurate, oddly enough. At 14k, you might have had excess withholding because the system calculated as if you'd make that amount consistently all year. At 29k, the calculations might be more precisely aligned with your actual tax liability. Also check if you're eligible for tax credits that have income limits or phase-outs. Some credits start reducing once you hit certain income thresholds.
0 coins
Pedro Sawyer
3 I went through the exact same situation last year and I was pulling my hair out trying to figure it out! After hours of research and frustration, I found this amazing tool called taxr.ai (https://taxr.ai) that analyzes your tax returns and explains exactly why your refund changed. I uploaded my returns from both years and it immediately showed me that my withholding percentage had actually decreased even though my income increased. Apparently when I got promoted, my employer adjusted my withholding rate but didn't take into account that I'd be in a different tax bracket by year-end. The tool highlighted the specific line items that changed and gave me a clear explanation that my tax professional had totally missed.
0 coins
Pedro Sawyer
•11 Does this actually work for comparing multiple years? My refund dropped by nearly $1200 this year and I'm totally confused about why. Can it pinpoint specifically what changed between returns?
0 coins
Pedro Sawyer
•18 I'm skeptical about giving my tax docs to some random website. How secure is it? And does it actually tell you something you couldn't figure out by just looking at the returns yourself?
0 coins
Pedro Sawyer
•3 Yes, it absolutely works for comparing multiple years' returns - that's actually one of its best features. It does a side-by-side analysis showing exactly which line items changed and by how much, then explains the impact on your refund. Regarding security, I was concerned about that too, but they use bank-level encryption and delete your documents after analysis if you want. The real value is that it explains everything in plain English - it doesn't just show the numbers changing but explains WHY they changed and how tax laws affected your specific situation. It saved me hours of research and confusion.
0 coins
Pedro Sawyer
11 Just wanted to update - I tried taxr.ai after asking about it and it was seriously eye-opening! Uploaded my 2023 and 2024 returns and it immediately showed that my withholding hadn't increased proportionally with my income. Also found out I had a education credit last year that I didn't qualify for this year because my income went up. The explanation was super clear and now I finally understand what happened. Definitely worth checking out if you're confused about your refund changes!
0 coins
Pedro Sawyer
21 If you're really concerned about your refund amount and think something might be wrong, you might want to talk directly to the IRS. I know that sounds horrible (I used to spend HOURS on hold), but I recently found this service called Claimyr (https://claimyr.com) that gets you through to an actual IRS agent in minutes instead of waiting for hours. They have a demo video here: https://youtu.be/_kiP6q8DX5c I used it when I had a similar issue with a refund that made no sense. They have this system that basically waits on hold for you and then calls you when an actual human at the IRS picks up. The agent was able to pull up my return and explain exactly why my refund was different than expected - turned out there was an error in how my employer reported some of my income.
0 coins
Pedro Sawyer
•8 Wait how does this actually work? Does it actually get you through to the IRS faster or is it just another automated system? The IRS hold times are absolutely ridiculous lately.
0 coins
Pedro Sawyer
•18 This sounds like a scam. The IRS phone system is what it is - no service can magically get you to the front of the line. And why would you pay for something you can do yourself for free?
0 coins
Pedro Sawyer
•21 It's not another automated system - it literally waits on hold with the IRS for you. Their system calls the IRS and navigates the phone tree, then stays on hold until a human agent answers. Once a real person is on the line, you get a call so you can talk directly to the IRS agent. You don't have to sit listening to the hold music for hours. It's definitely not a scam. I was skeptical too, but the service works exactly as advertised. As for paying for something you can do yourself - sure, you can absolutely sit on hold for 3+ hours if you want to. I personally value my time more than that. When I needed answers about my refund situation, it was worth it to get through in minutes versus burning half my day waiting.
0 coins
Pedro Sawyer
18 I have to admit I was completely wrong about Claimyr. After complaining here, I decided to try it since my refund issue was driving me crazy and I couldn't get through to the IRS. The service actually worked exactly as described - I got a call back in about 20 minutes with an actual IRS agent on the line! The agent explained that my employer had actually been withholding at a lower rate this year, which is why my refund was smaller despite earning more. I was able to update my withholding for next year right on the call. Saved me hours of frustration and now I actually understand my tax situation. Sometimes being proven wrong is a good thing!
0 coins
Pedro Sawyer
13 Have you checked if any of your tax credits changed? I had something similar happen when I turned 25 and suddenly wasn't eligible for some education credits. Also, did you have any side income or unemployment at all? Even a small amount can change your refund pretty dramatically sometimes.
0 coins
Pedro Sawyer
•1 I didn't have any side income and I don't think I had any special credits before. I've always just taken the standard deduction since my situation is pretty simple. I did pick up more hours at work toward the end of the year but I didn't think that would affect things so much.
0 coins
Pedro Sawyer
•13 The additional hours actually might be a big part of it. If you earned significantly more in the last quarter of the year, the withholding system might not have adjusted properly. The system typically assumes you'll earn the same amount consistently throughout the year. Another thing to check is if you had any changes to your health insurance situation. If you started getting insurance through your employer or had marketplace coverage with premium tax credits, these can significantly impact your refund calculation.
0 coins
Pedro Sawyer
9 Did you check if your filing status changed? Sometimes people accidentally select the wrong option (like going from Single to Head of Household or vice versa) and it dramatically changes the refund amount.
0 coins
Pedro Sawyer
•4 This is a good point. I've seen this happen with friends who didn't realize that just checking different boxes could change their refund by hundreds of dollars. Especially things like whether someone can claim you as a dependent.
0 coins