Watch Out ! Don’t Expect That Refund From IRS in 2023!
I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.
Hope everyone is ready to get back to reality when it comes to your tax Refunds from the Internal Revenue Service this coming tax season. Now, for my friends who try to break-even with their tax situation (I’m raising my hand here), this correspondence is not for you. However, for all of the individual that attempt to maximize their tax refunds each year, the IRS is forewarning you that your tax refund in 2023 (for 2022 tax year) will likely be greatly reduced from the past couple of years.
This is due to a lower amount for the Child Care Tax Credit. The credit for paying for childcare for at least one child has been reduced in 2022 from $8,000 in 2021, to just a maximum of $2,100 in 2022. And of course, if you’re paying for daycare for a dependent then it stands to reason that you’ll be looking to claim the Child Tax Credit. This is a credit given to parents for simply having to care of dependent children that range between the ages of newborn to 17. In 2021, the Child Tax Credit for dependents under the age of six was $3,600. While, the Child Tax Credit for dependents from the age of six to 17 was $3,000. In 2022, this credit has been reduced back to the previous level (2019) of $2000 per child age newborn to 17.
For those with dependent children, receiving the Earned Income Tax Credit, they have nothing to worry about, the credit remains at the same level as in past years. However, for single taxpayers (without dependent children) receiving the EITC, the amount has been reduced in 2022 to $560, down from $1,502.
Also, the deduction for charitable contributions for taxpayers not itemizing is disappearing. The deduction for the previous two years was $300 (single tax payer); and $600 for married filing jointly taxpayers. This is a small change, but when coupled with the other changes will just add a little bit more “fuel” to the fire of what happened to my refund.
Bottom line, the COVID programs put in place by congress and administered by the IRS have come to their conclusion. If you’re feeling overburdened by your tax situation or you’d rather be doing something else with your time, just remember we’re here to help you with all of your tax preparation, resolution/representation needs. Now and in the future. Don’t put off addressing your tax situation. Feel free to contact us with any questions you may have in approaching your specific tax scenario.