Tax Refund: Why might your return be smaller than last year?
Tax season has begun and taxpayers may receive less money in tax refunds than last year. What are the causes?
The Internal Revenue Service (IRS) has started processing tax returns, marking the official beginning o tax season
If one has worries about their ability to file by 18 April, an extension through mid-October can be requested from the IRS. It should be mentioned that the extension only applies to processing the declaration, not paying taxes. If you owe the IRS, the extension doesn’t apply to the amount owed.
How long will it take to receive my tax refund?
Once you’ve filed your tax return and the IRS has processed it, the government agency says it should not take more than twenty-one days to see your refund for those who have set up direct deposit.
If your refund will be sent through the mail, the timeline is extended from six to twelve weeks.
Read more from AS USA:
Why will tax refunds be lower this year?
According to a statement issued by the IRS through its official website, refunds are likely to be smaller than those sent in 2020 and 2021 because many of the pandemic relief programs have ended.
The various federal stimulus bills passed early in the pandemic:
- allowed those claiming unemployment benefits to subtract $10,000 from their total taxable income
- increased the value of the tax credit from $2,000 to $3,000/3,600 and removed income requirements
- provided three stimulus checks which could be claimed on one’s tax return if they did not receive them during the distribution period.
None of these tax benefits will be available when you file your 2022 return, which explains why you will likely see a decrease in the size of your refund.