CLARKSBURG, W.Va. (WBOY) — Your refund in 2023 for tax year 2022 may be smaller than in years past, the Internal Revenue Service (IRS) said in a press release Wednesday.
That’s because of several changes to the tax code that have been passed recently.
The IRS said that taxpayers who take the standard deduction instead of itemizing their taxes will no longer be able to deduct their charitable contributions, and the American Rescue Plan Act of 2021 lowered the reporting threshold for third-party networks that process payments for those doing business.
A 1099-K form can now be triggered by a single transaction that exceeds $600. The threshold to trigger the form used to be $20,000 in aggregate transactions.
For those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC): the IRS said it can not issue those returns until mid-February because the law requires it to hold the entire refund until then in an attempt to give the IRS more time to detect fraud.
Additionally, some large refunds for tax years 2020 and 2021 were because taxpayers who hadn’t received their Economic Impact “stimulus” Payments claimed them when they filed their taxes.
For those who use payment processors, and who receive a 1099-K for income they didn’t earn, like personal gifts or reimbursements for personal expenses—which are not taxable—the IRS says it can not correct the form, for you’ll have to call the issuer.
There are a few new or expanded tax credits taxpayers may be able to take advantage of, including the Premium Tax Credit and the Clean Vehicle Credit.
The IRS acknowledged that there were still 3.7 million unprocessed individual returns that it received in 2022 as of Nov. 11, as well as 900,000 unprocessed Forms 1040-X for amended tax returns.
“The IRS is processing these amended returns in the order received and the current timeframe can be more than 20 weeks. Taxpayers should continue to check Where’s My Amended Return? for the most up-to-date processing status available,” the IRS said in the release.
