Here’s Why Your Tax Refund Might Be Less This Year

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If you are counting on a tax refund, it may be “somewhat lower” than last year. IRS.

Generally, you can qualify for a federal refund if you overpay your annual taxes or withhold more than you owe. Experts say one big reason for the smaller payout this year is the expiration of the pandemic relief that was provided through the 2021 tax break.

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Meanwhile, many Americans are still struggling financially, with nearly a third of them relying on tax refunds to make ends meet, a recent Credit Karma poll showed.

Joe Boormann, Certified Financial Planner and Senior Financial Planner at eMoney Advisor, said lower refunds and high inflation could be a “double whammy” for some families.

According to the data, the average refund for the 2022 application season was $3,176 as of October 28, up almost 14% from $2,791 in 2021. IRS.

Why Your 2022 Tax Refund Might Be Less

Another pandemic era change was a more generous charity deduction in 2021, allowing claimants to receive tax credits even if they did not itemize the deductions.

The deduction – $300 for single applicants or $600 for married couples filing jointly – was a “significant amount” for many Americans, said Tony Molina, a Wealthfront certified public accountant.

How to increase the refund or reduce the account

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