Why Is My Refund Smaller Than My Sibling's Even Though We Have Similar Jobs?
Comparing refund numbers with a sibling who has a similar job, similar pay, and seemingly similar circumstances, only to find a big gap between the two, tends to raise more questions than a stranger’s different refund ever would.
The quick answer
Refund size depends on how much was withheld throughout the year compared to actual tax owed, not on income or job title alone. Two people with similar jobs can end up with very different refunds based on their state of residence, their W-4 elections, other income sources, deductions, and household circumstances like dependents or filing status.
Where the state you live in matters
State income tax rules vary widely, and some states have no income tax at all, which changes take-home pay and overall tax liability even when federal wages are nearly identical. Someone living in a different state than a sibling, or one who splits time between two states during the year, can see a meaningfully different bottom-line result for that reason alone.
How W-4 choices create different outcomes
- Filing status differences. A single filer and someone who is married, or married but filing separately, are withheld from differently even at the same income.
- Dependents claimed. Listing dependents on the W-4 reduces withholding throughout the year, which lowers a refund, or increases a balance due, compared to not claiming them.
- Additional withholding requests. Some people ask their employer to withhold extra from each paycheck, which increases a refund but reduces take-home pay throughout the year.
Two siblings can fill out the “claim zero” approach or the redesigned W-4 in slightly different ways and land in very different places by year’s end, even at similar pay.
Other income and deductions in the mix
A side job, investment income, student loan interest, or retirement contributions can all shift a final tax bill independent of the job itself. Even something as ordinary as one sibling contributing more to a workplace retirement plan than the other can change taxable income enough to affect the refund comparison.
A raise can widen the gap further
A recent raise adds another variable, since a refund can shrink after a pay increase even when withholding percentages stay roughly the same, simply because more income moved into a higher bracket or pushed other credits down. A sibling who received a raise more recently than the other, or who works more than one job at once, can see a refund shift for reasons that have nothing to do with how carefully either return was prepared.
Why comparing refunds isn’t a reliable benchmark
A refund is really just the difference between withholding and tax owed. A larger refund isn’t inherently “better,” since it generally means more was withheld throughout the year than needed. A smaller refund, or a small balance due, can reflect withholding that was closer to accurate all along, which is a different outcome than doing something wrong.
Putting it in perspective
Refund gaps between people with similar jobs almost always come down to withholding choices, state tax rules, and household-specific details rather than an error on anyone’s return. Reviewing each year’s W-4 elections and comparing them to actual tax liability, ideally with a tax professional or a reputable filing service’s built-in tools, tends to explain the gap more clearly than a side-by-side income comparison ever will.