Question

Suppose you filed your taxes and received a small refund from the IRS. What would have been the impact on the refund amount if you had increased the W-4 allowances for that tax year?

A)The refund would be larger

B)The refund would be smaller or you may owe taxes

C)The refund would not change

Answer 1

Answer: B: The refund would be smaller or you may owe taxes.

Step-by-step explanation: Taxes are based on how much you make per year. They're not based on allowances or how big your refund is. If you don't pay enough in taxes, you'll have a smaller refund or you might owe taxes. If you set allowances on your paycheck, for example, you'll pay less in taxes but you may set the wrong amount of allowances and owe taxes in the future.