‘Refund shock’ possible for Mississippians as IRS begins accepting returns today
Published 7:09 am Monday, January 23, 2023
Income tax experts are warning Mississippi filers about the potential for “refund shock” as many pandemic-era incentives and benefits end with this year’s filing.
“Refunds may be smaller in 2023,” a press release from the IRS reads. “Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no economic impact payments for 2022.”
Additionally, other special Covid-19 and special incentives have gone away, including:
- Child and dependent care: Limit for deductions drop back to $2,100 after peaking at $8,000 for Tax Year 2021.
- Child Tax Credit: Tax Year 2021 included an enhanced credit of $3,000 for children below 18 years old and $3,600 for children under six. This year, credits revert back to the previous limits of $2,000 for children under 17, and no credit for 17-year-olds.
- Charitable contributions: With pandemic-era allowances, everyone – including filers not itemizing – could get a $300 deduction for charitable contributions for their 2021 taxes. Taxes for 2022 to be filed this year won’t include that benefit unless itemizing taxes.
The average refund last year was $3,200, a 14 percent increase from the previous year. Taxes for this year must be filed by April 18 unless the taxpayer files an extension; however, one must remember the extension does not extend the deadline for paying taxes if owed. The average refund this year, according to tax experts, is around $2,700, close to the average two years ago.
A recent political hot topic to add IRS agents and support staff is also mentioned in a release from the IRS as the agency urges everyone to file electronically while using direct deposit. There are 3.7 million taxpayers still waiting for last year’s taxes to be finalized.
“For taxpayers who are still waiting for confirmation that last year’s tax return processed, or for a tax year 2021 refund or stimulus payment to process, their patience is appreciated,” the IRS released. “As of November 11, 2022, the IRS had 3.7 million unprocessed individual returns received this year. These include tax year 2021 returns and late filed prior year returns. Of these, 1.7 million returns require error correction or other special handling, and 2 million are paper returns waiting to be reviewed and processed. They also had 900,000 unprocessed Forms 1040-X for amended tax returns. The IRS is processing these amended returns in the order received and the current time frame can be more than 20 weeks.”