There are several factors that could mean a smaller tax refunds in 2023, the IRS said.
The Internal Revenue Service is issuing a warning for 2023: You likely won’t receive as large a tax refund as you have in the past.“Refunds may be smaller in 2023,” the IRS said in a statement. “Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no Economic Impact Payments for 2022.”
In the last two years, many taxpayers received additional refunds due to Economic Impact Payments –the official name for stimulus payments – issued during the COVID-19 pandemic. The last stimulus payment was issued in March 2021 and, with none coming in 2022, taxpayers won’t get the additional money in their refunds.Another big change is that taxpayers who don’t itemize and instead take the standard deduction won’t be able to deduct charitable contributions.
Money received via a third-party app from friends and relatives as a gift or reimbursement for personal expenses is not taxable, the IRS said. Processing on 2022 returns won’t start until into the new year but either way, the IRS cautioned against relying on receiving a tax refund by a certain date or counting on it to make major purchase of pay bills.If you purchase a product or register for an account through one of the links on our site, we may receive compensation.
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