Hi tax guru. In a nutshell, I am a single filer w/o dependents and no one can claim me. For 2008 I my wages were 29107.06. Federal withheld taxes are 2244.66 and state income tax is 1497.00. My 2007 state refund was 262.00 and I paid 850.00 in interest on my federal loan. When I entered this info into Tax Act and HR Block online, both of them showed my federal refund is 47.00. In 2007 I made much less and my return was almost $2000.00. What is going on?

You are now at higher tax bracket. What was your total wages in 2007? How much did you withheld in 2007? These are all relevant questions in order to answer your question.

Your tax refund is a function of 3 variables, {Your total income, Amount of federal and state tax withheld, and your tax rate}. Thus, the higher the taxable income, the higher the tax rate margin and the higher the income taxes that you would have to pay.

Usually single filiers claim 2 exemptions on their W-4 and generally will not get a substantial refund or owe a material amount in taxes. You should be happy that you do not owe any taxes and that your refund was not very high because it would mean that you lent the IRS monies at Zero percent interest rate!

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