Return Refund Amount or Taxes Owed Amount
Why do I owe taxes? Why is my refund lower this year? There is no way I owe taxes, what is wrong with my tax return?
A tax refund is composed of over-withheld taxes during the year plus any applicable tax credits you may qualify for. Due tax, however, occurs when taxes withheld plus tax credits do not cover the amount of tax assessed based on your income and filing status. If you under withhold and you do not qualify for enough tax credits, you will owe additional tax when you file your return.
eFile.com calculates all of this as you prepare your return. At the top of the screen is your current balance, either displayed as Federal Refund or Amount Due. If you are confused as to why you have a significantly lower or higher refund, or if you owe taxes when you normally are owed a refund, take a look at the forms you have filled out. You can return to each section under Federal Taxes or follow this path: Federal Taxes > Review > I'd like to see the forms I've filled out or search for a form. This link will display all of the forms you have entered thus far. Open them and take a look at all the figures entered - specifically the income forms, such as a W-2 or 1099 form - and verify the amounts.
It is possible that a mis-entry was made, such as a duplicate digit, a missing figure, or cents were included instead of only whole dollar numbers. If you are unsure of your refund or balance due and cannot determine what caused it, contact us here.
If you do in fact owe tax and want to look into this, see how to adjust your withholding with your employer via Form W-4. This page will show you how to withhold more during the year so you do not have a tax bill come tax season. Alternatively, if you receive a big refund, you may be withholding too much and giving the government an interest-free loan - consider reducing your withholding and hang on to more of your money during the year.
We assure you that there is nothing wrong with your return and would be happy to go over anything with you to help clear up any confusion if your return is not what you expected - contact us.
Possible reasons you owe tax when you have not in the past: your income level changed, you are not claiming a dependent you normally claim or they are older and do not qualify you for certain credits, you changed your filing status, you received self-employment income and did not make estimated tax payments.
See details on an IRS offset or refund adjustment.
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