NASHVILLE, Tenn. (WTVF) — You may want to mark your calendar. In less than two weeks, the tax filing season will officially start. But heads up, this year the IRS says your tax-refund may be smaller.
The IRS announced Thursday, it will start accepting electronic tax returns Jan. 23. And this year, families are warned not to bank on a big refund.
Since many COVID-related tax breaks are expiring, tax attorney Matthew Johnson, said your refund could be less lucrative.
"Congress issued we all know the stimulus payment and also they expanded certain types of credits, specifically the child tax credit and the child and dependent care credit. Coming this year, or really for the 2022 filing season, those credits were reduced and there's no more stimulus payments," he said.
For some families that could mean big changes.
In 2021, expenses like daycare came with a tax break worth $8,000. But in 2022, it's back to $2,100.
That same year, the child tax credit was $3,000 for children under 18. In 2022, it's $2,000 and only applies to children under 17.
"In some cases, some of these credits will result in substantial difference for some families," Johnson said.
According to the IRS, the average credit for tax season 2021 was $3,200.
Looking forward to a refund like last year's, Eleanor Bryan decided to start early this tax season.
"Oh yeah, I already filled out my stuff and got my estimated amount," Bryan said.
She was shocked to see her expected amount.
"It was significantly less even though I made almost double what I made last year," she said.
Johnson said he advises people to start getting organized in advance by gathering the appropriate documents. If you are using a professional, Johnson said it's important to make sure they are qualified and have a preparer identification number. He also recommends filing electronically to get refunds processed faster.
"I see in some cases, refunds can get lost in the mail. People won't be able find them. So it's best to have them deposited directly into your bank account, you get them fast, and then you're ready to go," he said.
Johnson said a silver lining is that come next year, the IRS has increased income thresholds for tax brackets, to adjust for inflation.
