There are a few reasons why your refund might be less than what was shown in TurboTax.
1. The IRS found a discrepancy in your return.
The IRS reviews the information you entered in your return and compares it with what they have in their database. If there are any discrepancies, they make adjustments accordingly and send your reduced refund.
Some common errors found are incorrect advance Child Tax Credit or stimulus payments amounts, which can cause significant reductions in your expected refund.
The IRS will send you a letter explaining the adjustment, but it usually takes about three weeks to arrive. If you got your refund already, check the IRS Where’s my refund? site to see what they adjusted and how it impacted your refund. It may take several days for the site to be updated.
2. You paid your TurboTax fees with your refund.
When you pay your TurboTax fees with your federal refund, the TurboTax fee plus a separate Refund Processing Service (RPS) fee are deducted from your total refund amount. So your IRS-issued tax refund might be less than the amount shown in TurboTax.
The total cost of the TurboTax fee and RPS fee combined can be anywhere from $39 to $320.
3. The IRS offset your refund.
A refund offset is when the IRS applies part of, or all, your refund toward past-due income tax, child or spousal support, student loans, or state unemployment compensation debts. If this happens, check the IRS Where's My Refund? or the Bureau of the Fiscal Service site for more information. You’ll also get a letter explaining why you didn't get your entire refund.
How to avoid refund discrepancies.
Make sure to enter the exact numbers from all of your forms and any letters you receive from the IRS on your tax return. The IRS compares everything you enter with what they have in their database, and if they find differences, they can adjust your expected refund. If you ever lose a letter you get from the IRS, you can always go to your IRS account to find the info you need. And if you need a new form, you can always reach out to the issuer for a new copy.
FAQs
When you pay your TurboTax fees with your federal refund, the TurboTax fee plus a separate Refund Processing Service (RPS) fee are deducted from your total refund amount. So your IRS-issued tax refund might be less than the amount shown in TurboTax.
Why is my refund lower than expected from TurboTax? ›
There are many events that may reduce your refund, including: Starting an additional job (especially self-employment) Getting a significant raise, but your W-4 staying the same. Selling stock, crypto, or other investments.
Why is my tax refund deposit less than what I filed? ›
Why is my refund different than the amount on the tax return I filed? (updated December 22, 2023) All or part of your refund may be offset to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans.
Is TurboTax refund amount accurate? ›
TURBOTAX ONLINE GUARANTEES
100% Accurate Calculations Guarantee – Individual Returns: If you pay an IRS or state penalty or interest because of a TurboTax calculation error, we'll pay you the penalty and interest.
Why did my refund amount change on TurboTax? ›
Filing Fees Deducted from Refund
If you elected to have the filing fees deducted from your refund rather than paying by debit or credit card, your refund amount will be reduced by the filing fees.
How do I find out why my tax refund was reduced? ›
Offset letter
BFS will send you a letter explaining why your federal refund was reduced and that it may take several weeks before the federal refund reaches FTB. They will also send any remaining federal refund amount to you. To get a copy of your letter, contact us.
How come I didn't get my full tax refund? ›
There are lots of reasons why this might happen. In most cases, the IRS takes part of your refund to pay for outstanding government debts you might owe. These include: Overdue federal tax debts.
Why did the IRS not deposit my full refund? ›
If you owe a federal tax debt from a prior tax year, a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt. In fact, in many situations the IRS is legally required to forward your refund to pay the debt.
Why is my 2024 refund so low? ›
If a taxpayer refund isn't what is expected, it may be due to changes made by the IRS. These changes could include corrections to the Child Tax Credit or EITC amounts or an offset from all or part of the refund amount to pay past-due tax or debts. More information about reduced refunds is available on IRS.gov.
What if direct deposit is wrong for tax refund? ›
You incorrectly enter an account or routing number and the number passes the validation check, but your designated financial institution rejects and returns the deposit to the IRS. The IRS will issue a paper check for the amount of that deposit once it is received.
100% Accurate Expert-Approved Guarantee: If you pay an IRS or state penalty (or interest) because of an error that a TurboTax tax expert or CPA made while providing topic-specific tax advice, a section review, or acting as a signed preparer for your return, we'll pay you the penalty and interest.
How do I know if I did my taxes correctly on TurboTax? ›
If you e-filed your tax return using TurboTax, you can check your e-file status online, to ensure it was accepted by the IRS. You'll also receive an e-mail confirmation directly from the IRS.
How much does TurboTax take from your refund? ›
#1 Best Selling Tax Software: Based on aggregated sales data for all tax year 2022 TurboTax products. Deduct From Your Federal Refund: A $40 Refund Processing Service fee applies to this payment method.
Why is my refund less than what I was told? ›
If you owe money to a federal or state agency, the federal government may use part or all of your federal tax refund to repay the debt. This is called a tax refund offset. If your tax refund is lower than you calculated, it may be due to a tax refund offset for an unpaid debt such as child support.
Why did TurboTax not give me my full refund? ›
When you pay your TurboTax fees with your federal refund, the TurboTax fee plus a separate Refund Processing Service (RPS) fee are deducted from your total refund amount. So your IRS-issued tax refund might be less than the amount shown in TurboTax.
Why is my estimated refund so low? ›
Changes to your income last year may play a role in receiving a smaller refund this tax season. Here are some examples: Salary increase: If you got a salary increase last year but neglected to increase your tax withholding, this could lead to a smaller tax refund when you file.
Why isn't my tax refund higher? ›
Examples that could decrease your refund include: Math errors or mistakes; Delinquent federal taxes; State income taxes, child support, student loans or other delinquent federal nontax obligations; and.
How to get a bigger tax refund? ›
How to boost your tax refund (or lower your tax bill)
- Work with a tax professional. ...
- Claim all eligible tax credits and deductions. ...
- Don't overlook deductible expenses. ...
- Choose the right filing status. ...
- Maximize your contributions. ...
- Adjust your W-4. ...
- File at the right time.
