Here’s Why Your Tax Refund May Be Less In 2023, The IRS

Here's Why Your Tax Refund May Be Less In 2023, The IRS
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If you expect a tax refund in 2023, it may be less than this year’s payment, depending on to the IRS.

You generally get a federal refund when you pay excess annual taxes or withhold more than the amount you owe.

Your annual balance is based on taxable income, calculated by subtracting the greater of the standard or itemized deductions from the adjusted gross income.

“Refunds may be less in 2023,” the IRS said in a November news release about preparing for the upcoming tax season. “Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no economic impact payments for 2022.”

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The agency issued the third round of stimulus payments worth $1,400 per person in 2021, and eligible Americans could claim unpaid funds on your tax return this year.

The average refund for the 2022 tax filing season was $3,176 as of October 1. 28, according to the IRSalmost 14% more than the $2,791 in 2021.

Charitable deduction for 2022 ‘not as robust’ as 2021

Also, it will be more difficult claim a deduction for charitable donations in his 2022 return, the IRS said.

The reason: “The deductions for charitable contributions in 2022 are not as robust as they are in 2021,” said certified financial planner Marguerita Cheng, executive director of Blue Ocean Global Wealth in Gaithersburg, Maryland.

In response to the COVID-19 pandemicCongress gave charities a boost in 2020 by offering a tax incentive for cash donations, and lawmakers tax break extended for 2021.

With a higher standard deduction since 2018, it has become more difficult to itemize deductions, including the tax break for charitable donations. Taxpayers choose the standard deduction or itemized deductions, whichever is greater.

But for 2021, you could claim up to $300 for cash donations or $600 for married couples filing jointly. regardless of whether you detail.

However, the tax break was not extended to 2022, which means there is no longer a benefit for charitable donations if you take the standard deduction, the IRS said.

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As of November 18, 2022 received 3.4 million individual raw returns, including filings from prior tax years, the IRS reported. These pending returns are 1.7 million that require error correction or other special handling, and 1.7 million paper submissions.

the agency has hired more workers prepare for the upcoming tax season, with plans to add more, with the goal of eliminating backlog and improving customer service. With almost $80 billion in IRS funds Over the next decade, these efforts are part of a larger plan for agency improvements.

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