There is a great chance that refunds could be smaller because taxpayers didn’t receive stimulus payments this tax year. They may need to prepare for smaller tax refunds in 2023.
What IRS Says on This Year’s Tax Refund
In accordance with the Internal Revenue Service, the reason refunds could be smaller is that taxpayers didn’t receive stimulus payments this tax year.
According to a published post by The Hill, the refund you receive is based on taxable income calculated by subtracting itemized deductions from your gross income. With this in mind, IRS is also reminding taxpayers not to rely on receiving their tax refunds by a certain date, especially when making major purchases or paying bills.
For you to receive your refund faster, an error-free return should be electronically filed and payments should be requested via direct deposit says IRS.
IRS Says 2023 Tax Refund May be Smaller
As many expanded benefits of the American Rescue Plan will no longer be available, there will be some major changes to tax deductions and credits for the tax year 2022 (to be filed in spring 2023). As a reminder to filers, they should be aware of which credits will be reverted or retired for filing. This will be including changes to the Child Tax Credit and Earned Income Tax Credit.
After the Internal Revenue Service raised them to account for inflation standard deductions for your 2022 and 2023 taxes will be higher. In this notion, the dollar amount taxpayers can hang on to will increase for many.
It is highly recommended to visit the Internal Revenue Service for further information on 2022 filing year credits and deductions. The deadline to file 2022 taxes will be Tuesday, April 18, 2023.