Small refunds make a big impact on families wallets this tax season

KEYC News Now at 6 Recording
Published: Feb. 3, 2023 at 6:52 PM CST
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MANKATO, Minn. (KEYC) - Small refunds could make a big impact on families wallets this tax season.

The IRS estimates 168,000,000 tax returns, 3,000,000 from Minnesota alone this year.

But tax filers may be surprised to see the difference in how much they receive, families especially.

“I’m sure tax professionals, tax preparers working on these returns are going to have to field a lot of questions and a lot of times tax payers aren’t expecting it so when it’s a surprise it’s hard for people to understand,” said Mankato Eide Bailly Department Head Brooke Forstner.

According to IRS spokesperson, Christopher Miller, this doesn’t come as much of a surprise.

“Remember, in 2022, there were no pandemic-related payments or credits,” explained Miller.

Stimulus packages and the advanced child tax credit are two examples of those pandemic related credits. The IRS says we’re seeing text credits return to 2019 levels for instance the child tax credit earned income tax and child and depending care credits are all reduced.

“For many families, that amounted to thousands of dollars and those are not present for tax year 2022,” said Miller. “So, when families prepare their taxes this year, they might see a smaller refund and that’s something that we want them to be aware of.”

One change that has been making headlines is the delayal of texting third-party apps to next year many use cash app payments to manage rent or utilities between household members. The Biden Administration altered a policy which would tax payments of $600 or more throughout the year, from apps like Venmo or Cash App.

“Potentially everybody’s to get a 1099-K from Venmo, and you’re going to have to somehow report that it is personal and you don’t need to pay taxes on it,” said Forstner. “And thankfully that’s why it was delayed. But I think there’s still a lot of more guidance needed.

The deadline for filing has been extended due to a weekend and holiday. Now the new deadline, Apr. 18.