Why is My Tax Return So Low 2024? Check the causes behind it!

Many people are excitedly awaiting their tax refunds in 2024 as tax season gets underway, hoping for an increase in income. But when they learn that their projected return is less than expected, some people might feel confused and let down. The explanations for the low tax refund in 2024 are listed below.

Why is My Tax Return So Low 2024

Many Americans anticipate receiving a smaller return than they did the year before, which is causing them some financial concern as tax season approaches.

Twenty-five percent of taxpayers believe they will receive a lesser refund in 2024 (for their 2023 tax return) than they did in 2023 (for their 2022 tax return), according to a December study of 2,500 individuals conducted by tax prep software business TaxAct. Over 33% of people expect their tax refund to be roughly the same.

“Why is my refund so low this year?” is a common issue that arises as tax season arrives. If your 2024 return looks a little low, you’re not alone. A smaller than expected return can be caused by a number of things, including changes in income, policy changes, and filing problems.

You’re not the only one wondering about this; hundreds of Americans are also considering it. Let’s examine some official IRS data and some explanations for why your return might not be as excellent as you had hoped.

What causes My IRS Tax Return to Be So Low in 2024?

A taxpayer’s refund might be reduced this year for additional reasons, such as a change in the number of dependents claimed, a change in filing status, a change in work, a rise in self-employment income, or other events that happened in 2024 but did not in previous years.

Here is a thorough explanation of the subject “Why is My Tax Return So Low 2024.”

In 2024, one of the main causes of reduced tax returns will be the constantly changing tax law environment.
The amount of money deducted from a person’s salary at the end of the year is a major factor in figuring out their ultimate tax burden or refund.
Verify your return again to be sure that all of the credits, deductions, and income reporting were done correctly. Your refund amount may be greatly impacted by even little mistakes.
Due to inadequate information, missing papers might cause processing time for your return and possibly lower your refund.
Tax credits and deductions play a key role in reducing taxable income and, in turn, the total amount of taxes owed.
Income fluctuations have a major impact on tax returns. An individual may find themselves in a higher tax bracket and hence have a larger tax bill if their earnings grow throughout the tax year.
The standard deduction was raised by the Tax Cuts and Jobs Act of 2017, which reduced the value of itemised deductions for taxpayers. Lower reimbursements might be the consequence of insufficient qualifying costs.
Refund amounts may also be impacted by limited tax credits such as the Dependent Care Credit, Child Tax Credit, and Earned Income Tax Credit.
Unexpected tax consequences might arise from life events like property sales, windfalls, or changes in marital status. These occurrences might result in higher taxable income or change a person’s eligibility for specific tax advantages.

How to Increase your Tax Refund 2024?

It takes a little study, some preparation, and basic tax planning to lay the foundation for a tax refund. You may maximise your tax refund by checking your tax status, talking to your spouse while completing W-4s, and utilising several tax credits.

Filing Status

Taxpayers may choose to file in one of several ways in various situations, and their choice will affect their return. For instance, Reams notes that filing as the head of household rather than as a single offers a higher standard deduction and reduced tax rates.

W-4 Withholding Calculator

When preparing your taxes, you may use a W-4 Withholding Calculator to estimate what you should include on your W-4 and modify the amount you anticipate receiving back. If you are qualified, claiming the Earned Income Tax Credit can lower your tax liability and possibly even result in a tax refund.

Wherever Possible List Deductions

Since the Tax Cuts and Jobs Act of 2017 raised the standard deduction, most taxpayers are no longer required to itemise. But, itemised deductions can result in financial savings for people who have made significant charitable contributions or have substantial medical costs. Donor-advised funds allow donations to be rolled over from previous years into a single year.

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