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Wrong tax refund amount? What now?

This post was updated May 10, 2017. Original text can be found here.

The 2017 filing season started slowly, but as of May 5 the Internal Revenue Service reports that filings are about on the same pace as last year.

Tax refund check

In fact, the total number of refunds issued so far in 2017 and the dollar total of all those U.S. Treasury checks is slightly larger than in 2016.

The overall average tax refund amount also was a bit bigger. It was $2,771 this year. That's 1.5 percent greater than the average refund taxpayers got in 2016.

IRS Action Through May 6, 2016 Through May 5, 2017 Percentage change
Tax returns received 139.620 million 138.945 million -0.5
Tax returns processed 132.748 million 132.446 million -0.2
Total refunds issued 101.244 million 101.641 million 0.4
Total amount of refunds $276.525 billion $281.661 billion 1.9
Average refund amount $2,731 $2,771 1.5


And if you had your refund directly deposited to a bank account, which more than 84 million filers have so far this year, then your refund amount was even bigger: $2,940.

Why so slow? The IRS doesn't speculate on why the 2017 filing season took a while to get in gear, but I will.

The filing season this year started a few days later than in 2016.

Then there was the mandated refund delay that meant the IRS had to hold a whole of refunds until Feb. 15. That hold, some say, caused confusion (not to mention frustration) among all taxpayers, not just those who were affected because they claimed the Earned Income Tax Credit (EITC) and/or Additional Child Tax Credit (ACTC).

As the filing deadline approached, however, the reasons really didn't matter. Taxpayers and the IRS finally caught up and the Treasury is sending out refunds at about the same rate as it did last year.

Refund check surprise: One thing, however, remains the same year after year. Some taxpayers are surprised when their refund check arrives.

Sometimes, the surprise is a good one. Your refund check is more than what you entered on your 1040.

Other times, though, the difference in the refund amount that shows up on the check or was directly deposited in your account is less.

In either case, your initial reaction — OK, your second reaction after "Yeeeessss!" or "What the…?" — is "What should I do?"

IRS should contact you: Whenever you get what you think is a wrong refund, expect an explanation from the IRS on the reason for the difference in your calculated refund amount.

The big problem here is that the notice typically comes separately from the check or direct deposit, so you have to wait.

If the amount is less than you expected, it's usually OK to go ahead and cash the check or spend the direct deposit.

If you disagree with the IRS rationale for the reduction and can show that you deserved the larger expected amount, the agency will make up the difference.

If, however, the IRS' math was right, then you've got all you're getting.

When a tax refund is larger than you expected — yes, it happens; that was the case in an unexpected $4,000+ refund the hubby and I got one filing season because of an error on my part — you might want to hold off spending the money until you get a satisfactory explanation.

That way if the IRS was too generous and you do happen to have to pay some or all of it back, then you've got that cash in hand.

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Isabelle Rozn

I was refunded a wrong amount this year and didn't understand why it happened. This article totally cleared things up for me. Thanks for posting!

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