What will 2023 tax refunds look like?
CLARKSBURG, W.Va. (WBOY) – Your refund for the 2022 tax year may be smaller than in years past, the Internal Revenue Service said Wednesday.
That’s because of several recently passed changes to the tax code.
The IRS said taxpayers who take the standard deduction instead of itemizing their taxes will no longer be able to deduct their charitable contributions. Also, 2021’s American Rescue Plan Act lowered the reporting threshold for third-party networks that process payments for those doing business.
A 1099-K form, which is used by third-party networks, can now be triggered by a single transaction that exceeds $600. The threshold to trigger the form used to be $20,000 in aggregate transactions.
For those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), the IRS said it can not issue those returns until mid-February because the law requires it to hold the entire refund in an attempt to give itself more time to detect fraud.
Additionally, some large refunds for tax years 2020 and 2021 were allotted because taxpayers who hadn’t received their Economic Impact stimulus payments claimed them when they filed their taxes.
For those who use payment processors, and who receive a 1099-K for the income they didn’t earn, such as personal gifts or reimbursements for personal expenses — which are not taxable — the IRS says it can not correct the form. Instead, taxpayers will have to call the issuer.
There are a few new or expanded tax credits that may be available to taxpayers, including the Premium Tax Credit and the Clean Vehicle Credit.
The IRS acknowledged that there were still 3.7 million unprocessed individual returns it received in 2022 as of Nov. 11, as well as 900,000 unprocessed Forms 1040-X for amended tax returns.
“The IRS is processing these amended returns in the order received and the current timeframe can be more than 20 weeks,” the IRS said in the release. “Taxpayers should continue to check Where’s My Amended Return? for the most up-to-date processing status available.”
Suggest a Correction