Tax season has officially started; the IRS started accepting tax returns on January 23. No matter whether you’re an early filer or if you tend to wait until closer to tax day, there are a few things to keep in mind.
First, the basics of the 2023 tax season:
- Tax filing deadline: April 18, 2023
- Extension deadline: October 16, 2023
Could you get a smaller tax refund this year?
The IRS is warning that some taxpayers may have smaller refunds. Aside from the fact that taxpayers are not getting an additional stimulus payment, there are a few other changes that might make your refund smaller this year:
A higher standard deduction.
For tax year 2022, the standard deduction increased to $12,950 for single filers and $25,900 for married couples filing jointly. It’s higher than previous years, which means it will be harder for some taxpayers to claim charitable deductions — a common way to reduce tax liability.
Child tax credit.
Tax year 2021 featured an enhanced child tax credit of $3,000 for children under 18 and $3,600 for children under 6. For 2022, it’s back to the old rules: $2,000 for children under 17.
Charitable contributions.
Deducting charitable donations is typically reserved for taxpayers who itemize deductions. Pandemic-era policies allowed all taxpayers to deduct $300 ($600 for married couples) worth of charitable donations even if they took the standard deduction, but once again, it’s back to the pre-pandemic tax rules, meaning that deduction will not be available for the 2022 tax year.
Remember: The goal is not to get a big tax refund. A tax refund means you gave the government an interest-free loan for a year. What you should be doing is adjusting your withholding so you don’t owe taxes and you don’t get a refund from the IRS every year. That way, you keep that hard-earned income in your pocket.
Timing of refunds.
Typically, you…
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