Tax Refunds in 2023: What You Need to Know
Tax refunds are a payment made by the government to taxpayers who have paid more in taxes throughout the year than they actually owe. Usually, tax refunds are not given after the tax filing deadline. That deadline this year was April 18 in the U.S.
Many individuals were wondering what they could expect in terms of tax refunds. While there are always uncertainties surrounding taxes, several key factors will likely impact tax refunds in 2023. Here are some things you would need to know.
Factors That Will Affect Your Tax Refunds in 2023
Here are several key factors that will likely impact tax refunds in 2023:
- Changes to Tax Laws: One of the biggest factors that can impact tax refunds is changes to tax laws. While there were no major tax law changes in 2022, it is possible that new tax laws could be enacted in 2023. These changes could impact tax rates, deductions, and credits, affecting your tax refund.
- Income Changes: Another factor that can impact your tax refund is any changes to your income. If you earned more money in 2022 than you did in previous years, you may owe more in taxes and receive a smaller refund. Conversely, if you earned less in 2022, you may be eligible for a larger refund.
- Withholding Changes: Changes to your withholding can also impact your tax refund. If you had too much money withheld from your paycheck in 2022, you might be eligible for a larger refund. However, if you didn’t have enough money withheld, you may owe money instead of receiving a refund.
- Stimulus Payments: If you received stimulus payments in 2022, they would not impact your tax refund for 2023. Stimulus payments are not taxable, so they will not increase or decrease your refund amount.
- Lower Refunds: This year’s tax refund won’t stretch as far as previous years, primarily because of inflation. Tax deductions from the pandemic era and expired credits (like child tax and earned income tax credits) are now in the rearview mirror. According to IRS, the average refund amount in 2023 is expected to be $1,963. This is 10.8% lower than last year’s average of $2,201.
- Delayed Refunds: Finally, note that your tax refund may be delayed in 2023. The IRS has faced significant backlogs and delays in processing tax returns in recent years, which could continue into 2023. If you are expecting a refund, receiving it may take longer than usual.
How to Facilitate and Expedite Your Tax Refund
The process begins with the gathering of paperwork. Organize all of your income-related information for the year, including but not limited to the following:
- W-2 Form
- 1099-NEC Form for Self-employment
- Student loan interest information
- Form 1098 on interest paid on your home mortgage
- Stock market capital gains for the year
Now that you’ve gathered your relevant tax season paperwork, it is time to consult with tax planning experts.
Niswanger Law takes pride in helping everyday people and business owners throughout greater West Monroe, LA and nearby areas prepare, plan, and file taxes. Our team will analyze your tax returns for inaccuracies, maximize your deductions and coordinate the transmission of your refund.
Have Questions or Need Help with Tax Planning? Contact Niswanger Law Today
Our tax planning specialists in West Monroe, LA are ready and willing to help you or your business this tax season. We take pride in maximizing refunds and helping local businesses mitigate tax burdens. Contact Niswanger Law today to schedule a consultation.