What Happens if Your Tax Refund is Incorrect? Steps to Take

25 July 2025

Tax season can feel like a never-ending roller coaster ride. Just when you think it’s over, something unexpected happens — like finding out your refund is off. Maybe the IRS sent you more money than you anticipated (free cash? Not quite), or maybe you got short-changed. Either way, if your tax refund is incorrect, the last thing you want to do is pretend it didn’t happen.

So, what actually happens if your tax refund isn’t right? What steps should you take to fix the mess? Don’t worry — you’re not alone. Let’s walk through it all in plain, simple English.

First Things First: Double-Check Your Tax Return

Before you sound the alarm, take a breath and go back to the basics.

Did you make a typo somewhere? Did you accidentally include or omit the wrong number? Take another look at your filed tax return.

Here’s what to check:

- Your income figures (W-2s, 1099s, etc.)
- Tax credits and deductions you claimed
- Your bank account details for direct deposit

Sometimes, a tiny mistake — like flipping two digits in your Social Security number — can throw everything off. Think of it like dominoes: one misstep topples the whole thing.

Pro Tip: Use tax software, or better yet, have a tax pro glance over your forms if you're unsure. A second pair of eyes never hurts.

Why Tax Refund Mistakes Happen

Let’s get this out of the way — mistakes can happen on your end or the IRS’s end. Neither is perfect. We’re all human, after all.

Here are some common reasons you might get the wrong refund amount:

- Math errors on your return (yep, still happens in the digital age)
- Missing or misreported income
- Wrong filing status
- Incorrect dependent information
- IRS adjustments, like correcting a tax credit you weren't eligible for

Sometimes, the IRS will make a change and not even tell you in advance. You’ll just get a reduced refund and a “notice” in the mail explaining the adjustment weeks later—kind of like getting a mystery scratch on your car and then a note left on your windshield.

What If Your Refund is Too High?

Wait, the IRS gave you more money than expected? Well, don’t start ordering pizza just yet.

Here’s the reality: overpaid refunds are not free gifts.

If it turns out the IRS made a mistake and gave you more than you were due, they will want that money back. And yes — even if their error, you may still be responsible for returning those funds.

Generally, they’ll either:

1. Send a notice asking for repayment
2. Adjust your next year’s refund
3. Offset your Social Security or federal payments, especially if you ignore their attempts to contact you

Whatever you do, don’t spend that extra money if you suspect something’s off. Refund karma is real, and Uncle Sam always circles back.

What If Your Refund is Too Low?

On the flip side, what happens if you didn’t get as much as you thought?

Maybe you were counting on a $2,000 refund, but only $500 showed up in your account. Not cool, right? But again, let’s not panic.

Here’s what to do:

- Wait for a letter or notice from the IRS — they usually explain why the refund changed
- Review your original return and compare it to IRS records
- Look for things like disallowed deductions, child tax credit errors, or math miscalculations

If it looks like they made a mistake, you can appeal. We’ll talk about how in just a second.

Steps to Take If Your Tax Refund is Incorrect

Now that we know why it happens, let’s get to the meat and potatoes — how to fix it.

1. Wait for the IRS Notice

The IRS doesn’t just ghost you. If they adjusted your refund, they’ll send a letter in the mail (not an email, thank goodness). This notice will:

- Detail the changes made
- Explain why your refund was altered
- Tell you what to do next

Important: Never ignore a notice. Stick it on your fridge if you have to, but read it and act on it.

2. Understand the Explanation

Sometimes the language in these letters can be more cryptic than a teenager’s text messages. If you can’t make sense of what the IRS is saying, contact them directly or talk with a tax professional.

You can also look up the notice code online (e.g., CP11, CP12, etc.) to get more info.

3. Check Your IRS Account Online

You can log into your IRS account to see:

- Your tax payment history
- The refund issued
- Adjustments made

It’s like checking your bank app after a night out — you may not like what you see, but it’s better to know.

4. Compare and Review

Pull up your original tax return and compare it line by line with the IRS’s changes. Make notes of what they adjusted and why.

If it’s legit, you might just need to accept it and move on. But if something doesn’t add up, it’s time to go deeper.

5. Respond Quickly (If Needed)

If you believe the IRS made a mistake, you can dispute their changes.

Here’s how:

- Write a letter explaining why you disagree
- Include a copy of the IRS notice
- Attach supporting documents (W-2s, receipts, etc.)
- Send it to the address listed on the notice

Be polite, but firm. Think of it like asking for a refund at a store — clear, confident, and with all your receipts in hand.

6. Consider Filing an Amended Return

In some cases, maybe you made the error. That’s okay. Happens to the best of us.

If you discover that you goofed up after filing, you can submit an amended tax return (Form 1040-X). This allows you to correct things like:

- Incorrect income
- Wrong deductions or credits
- Filing status errors

Just note: Don’t file an amended return until your original return has been fully processed. Otherwise, things get way messier.

7. Be Patient (Yes, Really)

Dealing with the IRS isn’t exactly like ordering Amazon Prime. It’s more like waiting for a handwritten letter from a friend overseas — it takes time.

If you send a response, amended return, or appeal, give them at least 8–12 weeks to respond. Some cases could take several months, especially during peak filing season.

When to Get a Professional Involved

Listen, if it’s a small amount or a simple mistake, you can probably handle it solo. But if things get complicated — say, the IRS is requesting thousands back or hinting at an audit — it’s time to call in backup. A CPA or enrolled agent can be a lifesaver.

Think of a tax pro like a mechanic for your finances — sure, you can try fixing things with YouTube tutorials, but some jobs need an expert.

Can You Avoid This in the Future?

Absolutely. While you can’t always dodge IRS errors, you can take steps to reduce your own risk.

Here’s how:

- Use reputable tax software that checks for errors
- File early to avoid fraud or identity theft
- Keep organized records of income, deductions, and credits
- Triple-check personal info (like banking and Social Security numbers)

And when in doubt, don’t hesitate to ask for help. One small mistake could cost you a big refund.

Final Thoughts

Having an incorrect tax refund isn’t the end of the world — but it does require action. Don’t ignore it. Don’t spend it. Just take a breath, gather your info, and follow the steps to fix it.

The IRS isn’t out to get you, but they do expect you to stay on top of things. And the better informed you are, the easier this whole “adulting” tax game becomes.

So next time tax season rolls around, you’ll be a little wiser, a little braver, and hopefully — a lot richer.