Why do some people get a bigger refund than others?
Its really simple. There are basically 2 reasons why some people get a bigger refund than others.
1. For Taxpayers with W-2's
In this situation, these taxpayers have simply overpaid in their federal withholding. In other words, they did not claim their full allowable dependent exemptions on their W-4, and had their employers withhold more federal taxes than required. Thus, come tax time, they would file their tax returns and receive a much bigger tax refunds than expected.
Additionally, these taxpayers may be entitled to the earned income tax credit, additional child tax credit and other tax credits. All of these tax credits could result in a higher tax refund than would normally be expected.
2. For Self-Employed Taxpayers.
In this situation, these taxpayers who have their own business are required to to make 4 estimated tax payments throughout the year. Sometimes, the taxpayers businesses yield a reduced taxable income and hence a reduced tax liability and so the estimated tax payments could considerably exceed the actual tax liability.
Thus, the taxpayer in this case would get a considerable tax refund. However, it is quite common for taxpayers with a business not to claim all the tax refund, instead electing to have the refund applied to the following years estimated tax payments.