Your refund amount comes from the IRS, not from the tax company you choose
The size of your tax refund is determined entirely by how much you overpaid in taxes during the year — not by which company prepares your return. TurboTax, H&R Block, Jackson Hewitt, and every other tax preparation service calculate the same refund from the same information. The IRS processes the return and sends the money. The tax company is the messenger, not the source.
What varies between tax companies is not the refund amount, but what they charge you and what services they bundle in. Some charge a flat fee. Some take a percentage of your refund. Some offer free filing if your income is below a threshold. These differences affect how much of your refund you keep, not how much the IRS owes you.
Key Takeaways
- The IRS calculates your refund based on your income, withholding, and deductions — the tax company has no control over this number.
- Tax preparation companies differ in their fees and pricing models, which changes how much of your refund you actually receive.
- Some companies offer free filing for lower incomes, while others charge flat fees or take a percentage of your refund.
- The fastest way to keep more of your refund is to use a company with no fee or a flat fee, rather than one that takes a percentage.
How the refund amount actually gets calculated
Your refund is the difference between what you paid in taxes (through paycheck withholding or estimated payments) and what you actually owe based on your income and deductions. If you paid $4,000 and owe $3,200, your refund is $800. This math is the same whether you use TurboTax or prepare the return yourself.
The tax company's job is to help you report your income, deductions, and credits correctly so the IRS can calculate what you owe. If two companies prepare your return from the same information, they should arrive at the same refund amount. If they don't, one of them made an error — and that error is on the person preparing the return, not the company's software.
The IRS then reviews the return, processes it, and sends your refund directly to your bank account or mails a check. The tax company does not touch the money.
Where tax companies actually differ in what you keep
The real competition between tax companies is in their fee structure. Some take a percentage of your refund — often 15 to 25 percent — which means if your refund is $800, they keep $120 to $200. Others charge a flat fee of $60 to $150 regardless of refund size. Some offer free filing for people below certain income thresholds.
If you have a $1,000 refund and use a company that takes 20 percent, you net $800. If you use a company with a $99 flat fee, you net $901. The refund itself is still $1,000 — you just keep more of it.
The IRS also partners with certain companies to offer free filing. The IRS Free File program includes options from companies like TurboTax, H&R Block, and TaxAct for people earning under a set income threshold (which varies by year). Using one of these services means no fee at all, so you keep the entire refund.
Why some companies advertise larger refunds
You may see ads claiming one company gets you a bigger refund than another. What they are usually claiming is that their software catches more deductions or credits you might miss — which could result in a larger refund. This is a claim about accuracy and thoroughness, not about the company creating money.
If one company's software prompts you to claim a deduction you would have missed, and that deduction is legitimate, then yes, your refund will be larger. But this is because you reported more of your actual tax situation, not because the company has special power. Any company — or a tax professional, or you yourself — could catch the same deduction if you knew to look for it.
The risk is that aggressive claims about "bigger refunds" sometimes lead people to claim deductions they do not actually may have access to for, which can trigger an audit or a penalty.
The difference between refund amount and refund speed
Some tax companies advertise rapid refunds or refund advances. These are not larger refunds — they are loans against your refund. The company lends you the money before the IRS sends it, and charges you interest or a fee for doing so. You end up with less money, not more, because you are paying for the speed.
The standard timeline is 21 days from when the IRS receives your return to when your refund arrives in your bank account (if you choose direct deposit). A refund advance might get you the money in a few days, but you pay 5 to 15 percent of the refund amount for that speed. Unless you have an urgent need for the money, this is a costly option.
How to compare what you will actually keep
To find the company that lets you keep the most of your refund, look at the total cost, not the refund amount. If you estimate your refund will be $1,200, compare the fee structure of each company you are considering:
- Company A: Free filing (IRS Free File partner). You keep $1,200.
- Company B: $99 flat fee. You keep $1,101.
- Company C: 15 percent of refund. You keep $1,020.
- Company D: Refund advance at 10 percent fee. You keep $1,080, but get the money in 2 days instead of 21.
The IRS Free File program is the lowest-cost option if you may have access to. If you do not, a flat fee is usually better than a percentage fee, especially if your refund is large. A percentage fee makes sense only if your refund is very small and the percentage is lower than a flat fee would be.
What to watch for when choosing a company
Some tax companies bundle fees in ways that are not obvious. They may advertise free filing but charge for state return preparation, or charge extra for certain forms or schedules. Read the full fee disclosure before you start, not after you have entered all your information.
Also check whether the company charges for amendments. If you file your return and then realize you missed something, amending the return may cost extra with some companies. This is rare but worth knowing.
The IRS Free File program has income limits that change each year. Check the IRS website directly to see whether you may have access to before you choose a company. If you are above the threshold, you may still find a company with a low flat fee that is worth more than a percentage-based fee.
Frequently Asked Questions
Can a tax company actually increase my refund?
A tax company cannot create a refund that does not exist, but good software can help you find deductions and credits you might miss on your own. If you claim a deduction you may have access to for but did not know about, your refund will be larger. This is not the company giving you money — it is you reporting your actual tax situation more completely.
Is it worth paying for a refund advance?
A refund advance is a loan, not a gift. You pay a fee (usually 5 to 15 percent of the refund) to get the money a few weeks early. Unless you have an urgent need, the standard 21-day timeline costs you nothing. The advance is worth it only if you cannot wait and the fee is lower than other borrowing options available to you.
What if two companies give me different refund amounts?
One of them made an error. The IRS will process whichever return you actually file, so the refund amount on that return is what matters. If you are unsure which is correct, you can file a return yourself using the IRS Free File Fillable Forms, or have a tax professional review both calculations to find the mistake.
Does using a paid tax company instead of free software change my refund?
Not if you report the same information to both. The refund is based on your income, withholding, and deductions — not on which software you use. A paid company may have better prompts to help you find deductions, but the refund itself comes from the IRS, not from the company.
Should I choose a company based on refund size or fee?
Choose based on fee. The refund size is set by the IRS. What changes is how much of it you keep. If you may have access to for the IRS Free File program, use it. If not, compare the total cost of each company and pick the one with the lowest fee for your situation.