NEW YORK – While some may expect to receive their tax returns in 2023, the IRS warns that smaller refunds will be available.
The IRS issued an announcement encouraging taxpayers to prepare for the upcoming tax season and warning people to moderate their expectations for their next tax refund.
“Refunds could be lower in 2023,” the IRS said. “Taxpayers will not receive an additional stimulus payment with a 2023 tax rebate because there were no 2022 economic impact payments.”
While no stimulus checks were distributed in 2022, not all eligible beneficiaries received theirs in 2021.
Those who missed their chance were able to claim the amount they owed when they filed for taxes in 2022. This pushed tax refunds for millions of Americans much higher than usual.
There hasn’t been another round of stimulus checks in 2022, so it won’t happen again.
Who gets a tax refund? What is the average amount?
IRS data shows that the average tax refund paid earlier this year was much higher than in previous years. For example, the average repayment in 2022 was $3,176, nearly 14% higher than the previous year’s repayment of $2,791. In 2020, the average repayment was approximately $2,550.
While not all tax returners receive refunds, most do. Of all 2022 taxpayers, two-thirds received a tax refund from the IRS, according to agency data.
Although millions of people rely heavily on refund checks each year, the IRS advises against this strategy.
“The IRS warns taxpayers not to rely on receiving a 2022 federal tax refund by a certain date, especially when making major purchases or paying utility bills,” the agency said. “Some returns may require further review and may take longer.”
Currently, the agency is still processing millions of tax returns. According to the IRS, there are still 3.7 million unprocessed returns from this year. The reason for the delay in processing is due to errors, processing delays, and poor customer service, according to a report by the National Taxpayer Advocate, an internal IRS watchdog.
While the IRS no longer has to deal with pumping out tens of millions in stimulus payments, a new rule enacted by America’s bailout is in effect for the upcoming tax season. The rule affects many people with minor issues using third-party payment services like PayPal or Venmo, or sites like Facebook Marketplace, Ebay, or Etsy.
In short, these companies are now required to submit 1099-K forms to anyone who has used their platform to sell goods or services worth more than $600 (gifts or personal payments do not apply). Previously, the threshold was 200 transactions or $20,000. People who didn’t meet that threshold in previous years should have reported their income to the IRS, but tax experts say many people don’t know they should file a return, or in some cases ignore that requirement, otherwise they do. . Do not receive documentation.
Now that new documentation is coming, and many will be filing taxes for the first time. This could also contribute to a lower tax refund for some taxpayers, and if the returns contain errors, this could lead to further delays with the IRS.
To prevent another huge delay from happening next year, the IRS is engaged in a hiring race. The agency said in late October that it had already hired 4,000 new customer service employees and plans to add 1,000 more by the end of the year.
To increase your chances of a quick refund, the IRS recommends filing electronically and registering for direct deposit.
