<prompt> Human: How can that be possible? I am a single household owner with no energy credits, no kids, 1 student loan. Last year for a few months I was on unemployment until I found a the job I am currently at. I havde similar pay but this yera i worked all year and yet my refund is 340 compared to 386 last year where I was only working 8.5 months?what are your thoughts Assistant: Your tax liability went up by a larger proportion than your tax withholding did.Refunds are not magic. They are simply the return of money that was always yours the whole year - that is why they are called refunds. If you receive a refund it is because you gave the IRS more money than you owed and they are settling the bill by returning the extra money to you.Human: so I get more money for working less?  <response>: No. You get more money for working more.Lets simplify this and say you have a tax liability of 1,000. That means the IRS states that your federal income taxes come out to 1,000.In scenario 1, you earn 10,000 and have 1,100 withheld for federal income taxes. This withholding occurs from your paycheck.1,000 - 1,100 -100 federal income taxes still owedThis mean you get a 100 refund!For Scenario 2, you earn 10,000 and have 900 withheld for federal income taxes.1,000 - 900 100 federal income taxes still owedThis means you will have to pay the IRS an additional 100.In both scenarios you earned the exact same amount 10,000 and in both scenarios you had the exact same tax liability 1,000. The difference between owing 100 and getting a refund of 100 all came about from your tax withholding being different. You did not have a greater tax liability because you had less withheld - you had the exact same tax liability no matter what.Now, lets do a third scenario.In Scenario 3 you earn 20,000 and you have a tax liability of 2,000.You can see that you both earned more and that you had a larger tax liability. Your tax liability in Scenarios 1 and 2 was just 1,000, but now that you are earning more, you have a larger tax liability. Does that mean you get more money for working less? No! You end up with 18,000 in Scenario 3 while in Scenarios 1 and 2 you have 9,000 in take home pay. Earn more, pay more in taxes, but also have more money in your pocket. 