Why Didn’t I Get My IRS Tax Refund as Expected?

You had the good fortune to receive a tax refund since you filed your taxes ahead of schedule. What happens, though, if the IRS deposits less money in your account than you anticipated receiving when you filed your IRS tax refund? Why your tax refund is smaller than you anticipated may be a mystery to you.

This tax season, returns from the IRS may not match expectations for several reasons:

  • The IRS changed how your return’s recovery rebate credit was computed.
  • Your return’s computed child tax credit was modified by the IRS.
  • Due to discrepancies in what was reported to them or changes to specific credits and deductions, the IRS made modifications.
  • As part of the treasury offset program, your refund is reduced

Additionally, it’s possible that all or a portion of your return was utilized (offset) to settle past-due taxes or debts.

The Child Tax Credit on Your Return Was Modified by the IRS

If information other than that provided by the IRS was recorded for your advanced child tax credit payments, your refund may be less than you previously anticipated.

Your 2021 advance payments total and the number of qualified children used to determine them were both listed on Letter 6419 that the IRS mailed to you. Your refund amount may be adjusted, and there may be delays if you failed to provide an amount. Or if the amount you entered differs from the amount the IRS has on record for you.

Note that married filers should obtain separate IRS letters 6419 from each spouse. To avoid a modification to your return and delays, the information from both letters must be in your tax return.

The Recovery Rebate Credit Calculated on Your Return Was Modified by the IRS

Due to information about your stimulus funds and the Recovery Rebate Credit, your tax refund may be less than you had anticipated.

Have you filed a credit claim to make up for late or insufficient third stimulus checks?

Many Americans who did not receive the third stimulus payment or the full amount they were otherwise entitled to may be eligible to claim a Recovery Rebate Credit. Especially when they file their taxes for the 2021 tax year (the taxes you generally file in 2022).

A recovery rebate credit is computed to increase your return if you indicated that you haven’t received the third stimulus check. However, if the IRS did send you one, the IRS will alter the amount of your refund accordingly. The refund amount that was initially determined for you when your tax return was filed gets decreased as a result.

According to the IRS’s announcement, if the stimulus credit amount is incorrect, the IRS will determine the proper amount, make the change, and proceed with processing the tax return. If a correction is required, this will delay the processing of the tax return. And the IRS will notify the taxpayer of any changes in writing.

Other IRS Modifications

Similar to the Recovery Rebate Credit scenario described above, the IRS compares the information on your IRS tax return with the information they have on file for you while processing your tax return. The IRS will make any necessary adjustments. The amounts on your tax return and those reported to the IRS by other sources may not match.

The IRS frequently makes modifications as a result of mistakes like the following:

  • Missed earnings, such as minimal interest shown on a 1099-INT or a W2 that isn’t there
  • Numbers that were switched around
  • Certain deductions or credits may be modified

When you wait until the last minute to file, several of these errors happen. Adjustments to credits or deductions as a result of someone else claiming you are dependent on their tax return, on the other hand, are a frequent problem that results in lowing a tax refund. Make sure no one else is claiming your dependent. And that you have proper information regarding whom you can claim as a dependent. Especially if you are eligible to do so and you are responsible for more than half of their support.

Treasury Offset Modification

The Treasury Offset Program may have lowered your tax refund. Overdue invoices owed to federal and state agencies are collected under the control of the Treasury Offset Program.

Delinquent debts that need to be recovered are submitted by several federal and state authorities, including the Department of Education and child support. When these bills are paid, the amount deposited is deducted from tax refunds.

Not all bills, nevertheless, are eligible for a tax break. Your tax refund will not be affected by bills from private lenders. Stuff like a missed cell phone bill or late auto payment.

If your tax refund is less than what you claimed on your tax return, the IRS will often mail you a notice. The message will detail the refund you were entitled to. As well as the amount by which your tax refund was reduced, the agency to whom the funds were transferred, and its contact details.

Your Part Time Accountant Has Your Back

Start preparing your taxes right away. If you have any inquiries, you can speak with a tax expert from Your Part Time Accountant and sort everything out.