If you’re expecting a tax refund in 2023, that amount could be smaller than this year’s payment, according to the report. to the IRS.
Usually, you get a federal refund when you’ve overpaid your annual taxes or deducted more than you owe.
Your annual balance is based on taxable income, which is calculated by subtracting the larger portion of your adjusted gross income from standard or itemized deductions.
“Refunds may be smaller in 2023,” the IRS said in a November newsletter about preparing for the upcoming tax season. “Taxpayers will not receive additional stimulus payments with the 2023 tax refund as there are no economic impact payments for 2022.”
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The agency issued the 3rd batch of $1,400 worth of stimulus payments per person in 2021 and eligible Americans can claim unpaid money on their tax return this year.
The average return for the 2022 application season was $3,176 as of October 28, according to IRSup nearly 14% from $2,791 in 2021.
Charity deduction for 2022 ‘not as strong’ as 2021
In addition, it will be more difficult to claim deductions for charity gifts The IRS says on your 2022 tax return.
Why: “The deductions for charitable donations in 2022 are not as strong as in 2021,” said Marguerita Cheng, certified financial planner, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland, said.
In response to the Covid-19 pandemic, Congress supported charities in 2020 by providing tax incentives for cash gifts and legislators. extension of tax-free period for 2021.
With the standard deduction higher since 2018, it has become more difficult to list deductions, including tax breaks for charitable gifts. Taxpayers choose the standard deduction or the itemized deduction, whichever is greater.
But for 2021, you can claim up to $300 in cash contributions or $600 for couples filing together, no matter you itemize.
However, the tax relief isn’t extended through 2022, meaning there’s no longer a benefit for charitable gifts if you take the standard deduction, the IRS said.
When to expect your tax refund
The IRS has warned taxpayers not to count on receiving their 2022 tax refund “on a certain date,” as some filings may require “additional review,” which could slow down the process. submit.
In general, you can expect a faster refund by submitting an error-free electronic return and receiving payment via direct deposit. However, mistakes and other problems, such as identity theftcan keep your refund, the agency said.
The person who filed the claim Earn income tax credits or child tax credit The IRS says it won’t receive refunds before mid-February.
As of November 18, there were 3.4 million unprocessed individual returns received in 2022, including records for prior tax years, the IRS report. These pending returns include 1.7 million claims that require correction or other special handling and 1.7 million paper filings.
The agency has hire more workers to prepare for the upcoming tax season, with plan to add more, to resolve backlogs and improve customer service. With almost $80 billion in IRS funding Over the next decade, these efforts are part of a broader plan to improve the agency.
