On January 23, the Internal Revenue Service will begin taking tax returns for 2022 income, with refunds being distributed in the weeks and months that follow.
Some of us may be in for a shock.
According to Khalfani-Cox, a specific tax benefit for charitable deductions during the pandemic era was also scrapped. Even after a year of stock market volatility, investors in mutual funds that have to sell off stocks may have to pay taxes on their investment gains.
Additional Tax Benefit For Donations
We consulted Khalfani-Cox, the financial expert also known as the Money Coach, to provide answers to some of the most frequently asked issues concerning this tax season.
If you file electronically and select direct deposit and there are no problems with your return, the IRS estimates that you will get your refund within 21 days.
As part of the government’s response to the COVID-19 outbreak, many Americans will get a $1,400 stimulus check that year, the third of such payouts.
Many families who have two kids under the age of six may lose an additional $3,200 in tax credits since the IRS has changed the rules for the upcoming tax season. The reason is that a family with two children under the age of six would only receive $4,000 in tax credits this year, whereas they would have received $7,200 in credits in the previous tax season thanks to pandemic legislation.
Donations to charities are tax deductible only for those who want to itemize rather than claim the standard deduction. For 2021 tax returns, this was altered by a temporary tax cut.
Read more: IRS sets new rule: Anyone with $600 income must report, file for taxes
What To Expect In 2023?
In addition, millions of Americans have reason to be concerned after learning that the government plans to begin requiring Venmo and similar peer-to-peer payment applications to declare income for products and services worth $600 or more yearly, a significant decrease from the prior threshold of $20,000.
The proposal was delayed by the IRS last month, so things have calmed down a little. However, as tax professionals point out, taxpayers are still responsible for disclosing all of their income on their tax returns, regardless of whether or not they received a 1099-K.
The standard date for submitting 2022 tax returns is Tuesday, April 18. The reason is: April 17 is celebrated as Emancipation Day in Washington, DC. Don’t put yourself in a bad position by ignoring a request for an extension of time if you know you’ll need it.
In addition, the IRS has already indicated that it will boost the standard deduction for 2023, from $6,350 to $13,850 for single filers and from $24,300 to $27,700 for married filers.
Read more: US economy: What to expect this year amid record-high inflation?
