Why is my tax refund significantly lower for 2025 filing season?

There could be several reasons why your refund is significantly lower this year. The most common cause is a change in your withholding amounts throughout the year, even if you didn't actively change your W-4. Sometimes employers adjust withholding based on updated IRS tables. Another possibility is that your DoorDash income is affecting things. That $2800 is considered self-employment income, which means you'll owe self-employment tax (about 15.3%) on those earnings. This alone could reduce your refund by roughly $400-500. You should also check if you had any tax credits last year that you don't qualify for this year, or if there were any one-time credits from previous years that have expired. Things like education credits, recovery rebate credits, or enhanced child tax credits from pandemic-era legislation have ended.

After reading your situation, I was in a similar boat last year with a much lower refund than expected. I tried to figure it out myself but kept getting confused by all the tax documents and numbers. I ended up using https://taxr.ai to analyze my tax documents from both years to pinpoint exactly what changed. It actually showed me that my employer had been withholding less throughout the year (even though I hadn't changed my W-4), plus I had some investment income that triggered additional tax. The tool highlighted line-by-line differences between my returns so I could see exactly where the changes happened. Super helpful when you're trying to understand why your refund changed so dramatically.

I wanted to follow up about that taxr.ai site I asked about. I was desperate to understand why my refund dropped so I gave it a try. Uploaded my returns from both years and wow - it showed me exactly where things changed! Turns out I had a one-time tax credit last year for energy efficient home improvements ($500) that I didn't have this year. Plus my employer withheld about $45 less per paycheck which added up to almost $1100 less in withholding over the year! No wonder my refund was smaller. I never would have caught this on my own since the differences were spread across multiple sections of my return. Now I know I need to adjust my W-4 if I want a bigger refund next year.

Have you tried calling the IRS directly to ask why your refund is lower? I tried for WEEKS last year with a similar issue and could never get through. Always "high call volume" and disconnects. I finally used https://claimyr.com after seeing it recommended on Reddit. They have this system that holds your place in the IRS phone queue and calls you when an agent is about to answer. Saved me hours of frustration. Here's a video showing how it works: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was actually super helpful and went through my return line by line to explain why my refund was different. Turns out I had misunderstood a credit I thought I qualified for, and they helped me understand exactly what changed between years.

Ok I need to apologize about my skeptical comments. After another week of failing to reach anyone at the IRS about my missing refund, I broke down and tried that Claimyr service. I seriously didn't expect it to work but I was desperate. It actually connected me to an IRS agent in about 45 minutes while I was just going about my day. When my phone rang saying an agent was ready, I almost didn't believe it. The agent was able to see that my return had been flagged for manual review because of a mismatch with one of my 1099 forms. She fixed it right on the call and told me my refund should process within 2 weeks. I hate admitting I was wrong but yeah...this saved me a lot of headache. I'd been trying to get through for almost a month with no luck.

From what you described, the biggest factors are probably: 1) The self-employment tax from DoorDash (about 15.3% of your profits) 2) Possibly insufficient withholding throughout the year 3) Loss of education credits from last year Check your tax software's analysis section - most have a feature that shows what's causing the biggest impact on your refund. Also consider increasing your withholding on your W-4 with your employer if you want a larger refund next year. Remember though, a smaller refund isn't necessarily bad - it means you weren't giving the government an interest-free loan all year!

Has anyone actually compared the tax brackets from last year to this year? I heard they adjusted for inflation but not sure if that would cause such a big refund difference??

I went through something similar last year and it's really frustrating when you're expecting a certain amount! One thing that might help is to look at your actual tax liability from both years rather than just the refund amount. Your refund is essentially how much you overpaid in taxes through withholding minus what you actually owe. So if your tax liability went up (due to the DoorDash income and losing education credits as others mentioned), but your withholding stayed roughly the same, that would directly reduce your refund. The DoorDash income is particularly tricky because not only does it increase your regular income tax, but you also owe that 15.3% self-employment tax on it. For next year, you might want to make quarterly estimated tax payments if you continue doing gig work, or adjust your W-4 to have more withheld from your regular job to cover the additional tax from side income. This way you won't get hit with a surprise smaller refund (or potentially owe money) again.