A huge group of United States residents will receive a surprise in the coming year 2023. This surprise is related to the 2022 tax refund. Some beneficiaries will see that many of the financial helps with respect to the pandemic years will end. This means that the tax refund amounts will be lower than in previous years.
Thus, many users who collect Social Security and receive a Tax Refund check may need to do their math right for next year. Not necessarily all users will see a reduction in their tax refund check, but a large portion of them will. That’s because those tax helps will change completely.
Some of the new tax rules were actually temporary. As soon as the economic situation has stabilized, taxes have returned to normal. So pay close attention to your taxes, because these helps have expired. You will not receive checks that you used to receive, and you may also see taxes increase.
Thus, it will not be possible to receive a $3,200 tax refund check, which was the average check in 2022. The checks will be smaller and, therefore, could be bad news for a large majority.
Why will my tax refund check be smaller?
This is because, as we’ve discussed before, a lot of help and a lot of benefits have ended. These are the benefits that no longer exist:
- Federal stimulus checks
- Expanded Child Tax Credit (CTC)
But those are not the only ones, as we find that the tax refund situation with respect to last year is very different. To avoid problems with the IRS and all things tax related, we should strive to be in control of the situation at all times.
To get there, the best thing to do is always to seek a specialist advisor. In some occasions, some citizens have saved a good amount of money in taxes thanks to hiring an economic advisor.
Changes that will affect the refund
In addition to what we have already discussed previously, the following changes should be noted:
- No stimulus checks. The United States government did not issue stimulus checks in 2022. Payments were authorized in 2021 under the American Bailout Plan.
- Child tax credit. The child tax credit is smaller and that affects the tax refund. This child tax credit was as high as $3,600 due to the pandemic. It is now back to the previous $2,000.
- Dependent care tax credit. Child care also falls into this category. This credit went as high as $8,000 through the Recovery plan. But now it is back to the maximum credit of $2,100. This is a very big change in the tax refund.
- Earned income. The situation changes again at the income level. Now the maximum help will be $560 and before it was as high as $1,500.
All these changes in income make the tax refund change completely for this year. Even so, remember to always file your tax return.