As much as 75% of the population got a Stimulus Check in 2022.
According to information from the IRS shared by CBS News, the average Stimulus Check was close to $3,200. The year-over-year growth rate was 14%. Yet this year’s US taxpayers could be disappointed if they were hoping for a similar bonanza. Later in 2022, the IRS issued a press statement indicating that 2023 tax refunds would be lower than expected. In addition, the value of your return may be reduced by inflation in 2023. Overall, there may be less cause for celebration this tax season.
Stimulus Checks Are Not Taxable
These are some potential setbacks, along with suggestions for adapting to them in the current economic context. The Advanced Child Tax Credit was increased for taxpayers last year. If you did not take the extra money in 2021, you might still get a refund in 2022 by claiming it on your federal tax return. Many households lost hundreds of dollars in tax savings when the federal government allowed the enhanced CTC to expire.
Also, in 2022, the government will no longer renew a tax incentive that allows for larger charity deductions. For taxpayers who file online and select direct deposit, the IRS claims that the refund will be issued within 21 days. Nevertheless, if you make mistakes on your tax return, it might hold up your refund. To those who qualify for the Earned Income Tax Credit (EITC), the wait for a return often extends until about the middle of February.
Even if your Stimulus Check arrives on time, it could not go as far because of rising prices.
To what extent your financial future depends on how you spend your tax return is something to consider. Many economists believe a recession is imminent, therefore they advise consumers to put their tax returns toward debt reduction or emergency reserves. There should be enough money to cover your bills for at least a few months, as well as insurance deductibles and any unforeseen costs, such as repairs to your house.
