Because of this, your tax refund could be smaller in 2023, the IRS says

Because of this, your tax refund could be smaller in 2023, the IRS says
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If you are expecting a tax refund in 2023, it may be correspondingly less than this year’s payment to the tax office.

Typically, you’ll get a government refund if you’ve overpaid annual taxes or withheld more than what’s owed.

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

“Refunds could be smaller 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 tax refund for 2023 because there were no economic impact payments for 2022.”

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

The average refund for the 2022 submission season as of October 31 was $3,176. 28 accordingly the tax officealmost 14% more than $2,791 in 2021.

Charity deduction for 2022 is “not as robust” as 2021

Also, it gets harder Entitlement to a deduction for charitable gifts upon your return in 2022, the IRS said.

The reason: “Deductions for charitable donations in 2022 are not as robust as they were in 2021,” said certified financial planner Marguerita Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.

In response to that Covid-19 pandemicCongress gave charities a boost in 2020 by offering a tax incentive for cash gifts and lawmakers Extension of the tax break for 2021.

With a higher standard deduction since 2018, it has become more difficult to itemize deductions, including the charitable gift tax credit. Applicants choose either 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 submitting together. regardless of whether you list.

However, the tax break wasn’t renewed for 2022, meaning there’s no longer a charitable gift benefit if you take the standard deduction, the IRS said.

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As of Nov. 18, 3.4 million unprocessed individual returns, including filings for prior tax years, were received by the IRS in 2022 reported. These pending returns total 1.7 million requiring error correction or other special handling and 1.7 million paper returns.

The agency has hired more workers in preparation for the upcoming tax season plans to add more, with the aim of clearing the backlog and improving 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.

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