It’s officially tax season. But before you get excited, the Internal Revenue Service says your refund check could be much smaller this season.
“Refunds are going to be drastically reduced,” Paula Harper, office manager for Jackson Hewitt, said.
That’s because many of the benefits provided during the pandemic have reached their conclusion. For example, Harper explained that this year, the child tax credit will return to pre-pandemic numbers.
Harper said, “Last year they were giving it as refundable credit. So, if you didn’t have a tax liability, you got the full $3,000 for children. So, this year it’s going back to $2,000, not fully refundable.”
Parents and caregivers will miss out on $8,000 in child or dependent care tax. Entrepreneurs will also see smaller refunds as the government will not be providing any new stimulus checks.
“You’re going back to the normal where you’re not going to get the extra credit,” explained Harper.
Along those lines, tax incentives for charitable donations are also going away.
So, how can you get as much as possible in the way of a tax refund?
Harper’s advice is to avoid filing your taxes without the aid of a professional preparer.
“Tax professionals are trained to be able to get every credit or deduction that you are allowed to get,” Harper said. “And they know the hidden laws that a lot of people don’t really know because they know the basics. And so, a tax professional can actually help you in getting all the refund that you truly do deserve.”
In addition to smaller refunds, filers should expect a longer turnaround time. The IRS says it is still suffering from staffing shortages.
So, if you are planning to use your refund for a big purchase or to pay off a bill, experts encourage planning ahead and filing as early as possible.