When one pays their taxes, they can be assured of a federal Tax Refund if they end up overpaying taxes throughout the year, or had withheld from their paychecks more than what they were owed.
Now, if you had been enjoying a nice tax refund in the last few years, you could be disappointed with the numbers when you file for your taxes. The IRS has already warned taxpayers that the refunds are going to get smaller this year. The main reason behind this is a loss of benefits during the pandemic, which is what led to an increased, much-needed, but ultimately temporary relief in the last two tax years. So, if you think you have issued everything in time, and are still quite disappointed with what you have received, this is what you need to know about the changes that affected this payment over the last tax year.
Tax Refunds Could Be Really Minuscule This Year
One of the biggest reasons for the loss of tax refunds has been the stimulus check payments that the federal government and the states had been providing to the citizens. The changes were not considered to be permanent, and the loss of the benefits issued during the pandemic could likely be reflected on one’s tax return in 2022. Also, anyone who hadn’t already received their payments from 2021 in the mail would have easily seen it reflected in their tax refund for the calendar year 2022. Yet, with absolutely no payments coming out in 2022- there was no relief that could factor into the tax refund.
In 2021, Congress also expanded upon the Earned Income Tax Credit and the Child Tax Credit significantly- but only on a temporary basis. This is why the tax refunds were contracted yet again in 2022.
