<prompt> Human: Last year I made about 19,000 and paid nearly 1,700 in federal taxes and was given a refund of about 960. This year I made just over 25,000 and paid roughly 2,350 in federal taxes alone and theyre estimating my refund as 595...how come Im getting less this year? Did I hit a new tax bracket? I believe I even changed my tax claim status from 1 to 0 to maximize my returns this year.  <response>: You did hit a new bracket assuming you are single with no dependents but dont make the mistake that most people do - hitting the next tax bracket only effects income inside that bracket. Income in the lower bracket still gets taxed at the lower rate.Heres the breakdown: If you are single with no dependents, you got to take home 10,350 tax free in 2016 10,300 in 2015. This is the combination of the personal exemption and the standard deduction. From here, I have to make some assumptions, so my numbers wont be an exact match to yours, but they illustrate the point.That means that in 2015, you only paid tax on the remaining 8,700. This is all in the 10 bracket, so you owed a total of about 870 in taxes for 2015. Since you paid more than that, you got the extra back as a refund.In 2016, you now had 14,650 that you had to pay taxes on. The first 9,275 fills up the 10 bracket, and you pay 928 in taxes on it. The remaining 5,375 is in the 15 bracket, and you pay 806 in taxes on it. This is a total of 1734 in taxes for 2016. You paid more than this and got the rest back.As you can see, the effective tax rate total tax divided by total income went from 4.6 to 6.9. This is the true effect of having income split across multiple tax brackets. 