Tax refunds have become an essential extra check that many taxpayers receive once a year. Having a large check allows many people to pay for unexpected expenses, pay off debt, or even a few of them go on vacation. It is more than likely that you may collect a smaller check this year. Bear in mind that many tax credit amounts went back to normal.
Besides, stimulus checks are also over, so there are several reasons why they are not that big. It would be best to compare this check with the ones you got before the pandemic. Then, you may see that they have similar amounts perhaps and the difference might be the increasing cost of living. According to the Internal Revenue Service, tax refunds are a little more than 3,000 dollars. Thus, there is a drop of 11 percent so far.
Which is the easiest and fastest way to increase your tax refund?
The best way to increase your tax refund check is by claiming all the tax credits you are eligible for. Those who have just gotten a child should know that it is possible to get $2,000 per kid. As long as they were younger than 17 in 2022, you could claim it. It is true that the amount of this tax credit is much lower than it used to be last year, but it is still a lot of money.
Apart from the child tax credit, there are other possibilities you may want to explore. If you have never enjoyed a tax credit, you should know that they reduce the amount of money you owe the Internal Revenue Service. Making your federal income taxes lower is money you are saving or even getting extra. A deduction is another great way to make your refund bigger. They reduce the amount of your income before working out the taxes you owe.
Which types of tax credits are available?
There are plenty of credits to make your tax refund bigger. Those who are parents or have families with children might get the Child Tax Credit if they meet income requirements. Credit for Other Dependents is also available. What is more, if your child or any other family member is dependent, you could claim the Child and Dependent Care Tax Credit. In this case, the check could be up to 6,000 dollars. There is also the possibility of claiming an Adoption Credit, which is a nonrefundable credit.
Let us not forget about the Earned income tax. Not only is it available for families, but also for other taxpayers. Those into education could benefit from the Lifetime Learning Credit. It could be up to 2,000 dollars. In addition to this, there is also the American Opportunity Tax Credit. Moreover, a tax refund could become larger if you claim the Premium Tax Credit for health care or the Saver’s Tax Credit.
Home and car owners can also take advantage of credits. Take for example The Electric Vehicle Credit, the Clean Vehicle Tax Credit, Mortgage Interest Credit, the Residential Clean Energy Credit, or the Energy Efficient Home Improvement Credit.