Many tax benefits instituted during the pandemic have lapsed, which means some people could see smaller refunds.
The year 2021"was quite a remarkable year with the insertion of all those new tax breaks," Steber noted."But jump ahead to this year, and a lot of the increases expired, hence the term 'refund shock' or 'refund surprise.'"
And if you've suffered investment losses this year, consider selling one or more of those positions given that you can deduct up to $3,000 in losses against your earnings, lowering your taxable income. The government did not issue any stimulus checks issued in 2022, with the third and final payment authorized in the spring of 2021 through the American Rescue Plan Act.
But in 2022, that tax credit reverted to its pre-pandemic level of $2,000 per child, regardless of age. While that's certainly a help, that slimmer tax break could make an impact on parents' refunds. During the pandemic, the EITC was increased for a group of workers who typically don't benefit much from it: Adults without kids. In 2021, low-income workers without children were eligible to receive a credit worth up to $1,500. Low-income parents who qualify for the EITC will actually receive slightly higher amounts in 2022, as that figure is adjusted annually for inflation.
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