As of November 11, 2022, the Internal Revenue Service has 3.7 million unprocessed individual tax refund. It also covers late-filed prior-year returns for the tax year 2021.
The IRS urged people to take quick action before the year is up in order to simplify the process of submitting their federal tax returns for 2022.
Smaller Tax Refund in 2022
However, the agency warned on Wednesday that a number of recently implemented tax code amendments may result in a lesser tax refund for the 2022 tax year than in the past. Taxpayers also received higher tax refunds since they did not receive their Economic Impact Stimulus payments for the 2020 and 2021 tax years.
The IRS stated in a statement that they are now processing updated returns in the order they are received, and the current wait period may exceed 20 weeks. The IRS advised filers to keep checking Where’s My Amended Return for the most recent progress update.
Despite the lesser tax refund in 2022, there are a few newly enlarged tax credits available to taxpayers, such as the Premium Tax Credit and the Clean Vehicle Credit.
Tax experts pointed out that the expanded Child Tax Credit is the main issue that could have an impact on the 2022 tax refund. When it will begin receiving tax returns has not yet been announced by the IRS. But it normally starts accepting fresh applications near the end of January.
When a taxpayer pays the IRS more during the course of the year than they owe, they are given a tax refund. The difference is then paid with a check by the IRS. Tax experts noted additional problems with the Child Tax Credit that can reduce a taxpayer’s tax refund, such as those who received CTC payments while not being eligible for them.
Many consumers may be in for a nasty awakening this year, according to Christian Cyr, a CPA and president, and chief investment officer at Cyr Financial.
Additionally, the fact that so many people may receive smaller refunds this year may be related to unemployment benefits in 2021. People who received unemployment benefits may elect to have their taxes withheld; if they do not, back taxes will be due.
READ MORE: Tax Credit 2022: Here’s The Available Stimulus Check Up To This Day!
How to Estimate Your Tax Refund?
READ MORE: Child Tax Credit 2022: What To Do If You Missed The Deadline?
Taxpayers can use a tax calculator to estimate their tax refunds or tax obligations. There are tools or calculators for 2022 tax refunds that enable taxpayers to provide more detailed inquiries.
The IRS also provides a Tax Withholding Estimator that requests information about you as well as specifics regarding your income and withholdings as well as adjustments, deductions, and tax credits.
When using the tax calculator, you will also be asked about your gross income for the tax year and how much you contributed to a 401(k) or traditional IRA.
Additionally, the number of dependents will be needed. Children under the age of 17 and CTC-eligible individuals are considered dependents.
Tax calculators typically assist in estimating tax refunds and tax bills, or they can indicate that you might require expert assistance if your tax bill is higher or your refund is lower than anticipated.