How will slashing COVID aid affect my tax refund?

Taxpayers could expect to get lesser returns in 2023. The IRS claims that since taxpayers did not get stimulus monies this tax year, refunds may be less than usual.

Because many of the epidemic tax advantages, like the expanded child tax credit, child and dependent care credit, and stimulus payments, expired in 2021, the IRS is already advising filers that their 2022 refunds may be less than their refunds from the previous two years.

CNBC explains that after removing your itemized deductions from your gross income, your taxable income will be the basis for your return. So, especially before making “major purchases or paying expenses,” the IRS advises people not to count on getting their tax returns by a specific date.

In 2021, the government sent out its third batch of stimulus payments, totaling $1,400 per person, and taxpayers still owed money may file for it this year.

As of October 28th, the IRS reported that the average refund for the 2022 filing season was $3,176, an increase of over 14% from the average return of $2,791 in 2021.

The IRS recommends filing your return online and requesting direct deposit if you want your refund as quickly as possible.

For the tax year 2022 (to be filed in spring 2023), there will be significant changes to deductions and credits as the enlarged advantages of the American Rescue Plan expire. The Child Tax Credit and the Earned Income Tax Credit are two examples of credits that will be modified or abolished, and TurboTax is advising users to be aware of these upcoming changes.

The IRS increased standard deduction amounts for tax years 2022 and 2023 to reflect rising prices. This implies that many taxpayers will be able to keep more of their hard-earned money.

Please go to the IRS website for further details on tax credits and deductions for the 2022 tax filing year. On Tuesday, April 18th, 2023, you must submit your tax return for the year 2022.