Why Your Tax Refund Wasn’t so Big This Year

As a taxpayer, you receive a federal refund whenever it turns out that you overpaid taxes during the year or withheld more from your paycheck than you ultimately owe. If you’ve enjoyed getting some good, big refunds in recent years, you may have been disappointed with your numbers when you filed your tax return, and you’re not alone.

The IRS itself recently warned taxpayers that there are indeed fewer refunds this year. The main reason is the loss of benefits during the pandemic era, which led to an increase in much-needed but tragically temporary relief in the previous two tax years. (And if you missed the April 18 deadline and didn’t ask for an extension, you should file your tax return ASAP .)

If you got everything on time and are still disappointed with what you’re getting from the government, here’s what you need to know about the changes that affected last tax year.

Losing the benefits of the pandemic era

In response to the financial impact of COVID-19, state and federal governments have provided various stimulus programs and expanded several tax credits. Unfortunately, these changes have not been permanent, and the loss of benefits during the pandemic era will likely show up on your 2022 tax return.

No More Incentives

Anyone who has not yet received their 2021 COVID relief checks in the mail would see this reflected in their 2022 tax refund. towards the tax refund you receive in 2023.

Less tax deduction per child

In 2021, Congress significantly expanded the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) , but only temporarily. These loans declined again in 2022.

Taxable government assistance

The good news is that more than 50 million Americans received some form of stimulus from their states last year. The bad: These state benefits may be taxed by the federal government. The federal agency may have treated your state check as income, which means you may have to pay additional taxes. (Here ‘s how to check if the government – state or federal – still owes you stimulus money .)

The point of your taxes for 2022 is that everything is back to pre-pandemic norms, only with post-pandemic inflation. Big.

As we noted above, if you fail to file your tax return on time, you should file your tax return as soon as possible and, if you must, pay your due tax as soon as possible to reduce it. penalties and interest.