The Data You Enter vs. The Data the IRS Uses Are Not the Same
Every tax season, millions of filers become frustrated when the refund amount shown in TurboTax, H&R Block, or other tax software does not match the final refund issued by the IRS. The assumption is that the software “made a mistake.” But in reality, the IRS is not basing your refund on what you entered — it is basing it on what was actually reported to them by employers, banks, and financial institutions.
This is the Software vs. IRS Data Mismatch, and understanding it is key to avoiding surprise refund reductions.
When you enter:
the tax software assumes you entered it accurately.
The software calculates your refund based on your self-reported figures.
But the IRS does not trust the numbers you enter.
The IRS verifies your data against:
If their numbers don’t match yours — the IRS wins.
Example:
If you enter:
W-2 wages: $46,200
But the employer reported to IRS:
W-2 wages: $47,150
The IRS will calculate your refund based on $47,150 — not your entry — even if the difference was an honest typo.
The same applies to:
Software estimates are only as accurate as the inputs you provide.
You worked two jobs — you entered one employer, but not the other.
Side hustle income on:
gets reported to the IRS — even if you forget to enter it.
Even $13 of bank interest must be declared.
Form 1095-A does not match Form 8962.
What you think you paid doesn’t always match what the school reported.
Claiming a dependent the IRS sees claimed on another return.
Your transcript may show:
This means the IRS adjusted your return — and therefore your refund.
Software may have said you were getting:
$3,200
But the IRS approves:
$2,110.
The difference is due to the IRS recalculating using official reported data — not your entries.
TurboTax, H&R Block, and others:
The IRS does.
The software merely simulates — based on the numbers you give it.
Because the software:
But the IRS often discovers that:
This is why many taxpayers see a different refund amount than they anticipated.
Don’t guess your earnings.
This allows you to see the exact data the IRS has.
Use actual paycheck data.
Especially in shared custody situations.
When tax software shows an estimated refund, it is a calculation based on your entries, not the IRS-validated figures.
If the final IRS refund is smaller, it’s almost always because:
Software estimates are helpful — but they are not guarantees.
The IRS always performs the final calculation.
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