Why Your Refund Might Be Smaller - Tax Advisor | Phoenix Tax Consultants

Why This Year’s Refund Might Not Be What You’re Expecting

tax advisor

In 2022, many Americans got a substantial tax refund, but it seems that in 2023, the average refund is about 11% lower than last year. According to IRS data, typical refunds in 2022 were around $3,473, while this year most refunds are $3,079. This could be difficult for Americans dealing with the effects of inflation, especially when so many rely on refunds to help them make financial ends meet. In this article, we’ll be discussing the reason why refunds are somewhat smaller so you can be prepared and you’ll also find out how you can boost your refund next year with the help of an expert tax advisor!

Why were last year’s refunds larger?

In 2022, refunds were generally larger than they had been previously due to pandemic-related policies like the expanded child tax credit and stimulus check payments. Those who had not received them throughout the year had the opportunity to receive them through their tax refunds, making them larger than usual.

Of course, because taxpayers will not be getting these stimulus payments or the expanded child tax credit this year, refunds will be noticeably smaller. The child tax credit allowed families to claim up to $3,600 per child on their 2021 tax returns. This year, that’s back down to $2,000 per child.

There’s still good news, though: although refunds are somewhat smaller this year, more taxpayers are getting refunds rather than owing money.

Keep in mind that the amount of money you’ll be refunded depends on how much you overpaid in taxes during the 2022 calendar year. Whether or not you overpay in taxes is based on a variety of factors, including the amount that you choose to have withheld from your paychecks, whether or not you’re eligible for tax credits, and the number of deductions you can claim.

If you earned more income, increased your withholding, had a change in filing status, or became eligible for credits you weren’t previously eligible for, your tax refund could potentially increase.

How a tax advisor can help you boost next year’s refund

By taking some time to work with a tax advisor and plan ahead for next year, you could get a little more money back next year, or at the very least take steps to avoid owing money. A tax advisor, like one of the tax experts from Phoenix Tax Consultants, can work with you to make sure that you’re claiming all credits and deductions that you’re eligible for. We can also provide you with advice about how your retirement plan can help you reduce your taxable income so you can increase the size of your refund.

Phoenix Tax Consultants is committed to providing tax minimization recommendations and high-quality customer service for each and every client for a fair price that reflects the value we add to their tax preparation process. We are not a chain tax resource. We have a dedicated team of CPAs, Enrolled Agents, and experienced preparers available year-round to meet our client’s tax preparation and planning needs.

When you let us handle your taxes, you can be sure that your tax preparation will be completed quickly and accurately. We also offer virtual and in-person filing options, so filing your taxes is always convenient and easy for you. With more than 30 years of local tax preparation, tax planning, and audit experience, why would you trust anyone else with your tax needs? Schedule an appointment today!

Leave a Reply

Now Preparing Extensions and Strategic Planning - Don't Wait Until Tax Time!