What You Need to Know This Tax Season (2022-23 Guide)

If it’s that moment on the calendar when prognosticating becomes a daily ritual in America, it must be tax filing time again.

Roughly 168 million of us know we must do it and roughly 167.9 million of us put off the process as long as possible.

Officially, the Internal Revenue Service began accepting returns January 23, but even as that window was opening, the agency cautioned taxpayers against rushing to file, for at least a couple of reasons.

First, some key documents might not be received until the middle of February. Key among them, Form 1099-K, reporting income for third-party payment networks such as PayPal and Venmo.

Second, the IRS hadn’t decided about the status of special tax refunds and other payments issued by 19 states as relief against inflation.

As this is written, however, those key dates and decisions have been achieved. Taxpayers who availed themselves of the gig economy in 2022 most likely have received all their 1099-Ks; and, on Super Bowl Friday, the IRS declared nontaxable the millions of state payments to alleviate inflation’s crush.

In short, the coast is clear. Before you file, however, here’s what’s new, or different, about this year’s tax-filing season.

2022-23 Tax Changes: How This Year Is Different

Brace yourself: The expiration of assorted credits and deductions, enacted to soften the impact of the COVID-19 pandemic, means many — perhaps most — taxpayers will endure smaller refunds this year. Some who failed to plan properly may even wind up owing the government.

» Learn More: What to Do When You Can’t Pay Income Taxes

Here’s the skinny:

Some Tax Credits Revert to 2019 Levels

Affected taxpayers will experience what the IRS calls “a significantly smaller refund” compared to the previous tax year. Shrinkage has come to the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and the Child and Dependent Care Credit.

  • Recipients of $3,600-per-dependent child tax credits for 2021 will, if still eligible, get $2,000 for the 2022 tax year — a whopping 44% reduction.
  • Eligible taxpayers with no children who qualify for the EITC will see their benefit dip 66%, to $500 from $1,500 in 2021.
  • The biggest cut of all involves taxpayers claiming the Child and Dependent Care Credit, which tumbles 74% to its pre-pandemic maximum of $2,100 (compared to $8,000 in 2021).

No More Stimulus Payments

As part of its ongoing response to the pandemic, millions of Americans received a $1,400 payment in 2021. Some taxpayers who didn’t get a check were able to claim the credit when they filed their tax returns in 2021. No stimulus checks in 2022 means no credits when filing in 2023.

Above-the-Line Charitable Deductions Are Gone

Remember when part of the argument for signing up for an automatic paycheck payment to the United Way was you could deduct up to $600 in charitable donations even if you used the standard deduction? Your altruism is about to be tested: As of the 2022 tax year, those using the standard deduction (most of us, by far) may not take an above-the-line deduction for charitable donations.

More People May Be Eligible for the Premium Tax Credit

It’s not all expensive news. Taxpayers who get coverage through the Health Insurance Marketplace may yet qualify for a tax credit to help meet their premium payments.

Eligibility Rules Changed to Claim a Tax Credit for Clean Vehicles

Taxpayers who bought electric vehicles for personal use in 2022 remain eligible for a credit of up to $7,500 against their tax bill. Restrictions apply.

On the upside, there’s good news regarding the standard deduction, used by more than 90% of individual taxpayers.

Married couples filing jointly for tax year 2022 will see their standard deduction rise $800, to $25,900. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400. For heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.

When Can You File Taxes in 2023?

As mentioned above, filing season began, officially, January 23. The deadline for paying the IRS what you owe (without penalties or interest) is April 18 (a three-day reprieve because of quirks in the calendar). For most taxpayers, April 18 also translates as the deadline for filing your IRS-mandated forms, and there’s nothing wrong with that.

Indeed, the earlier you file, the lower are the odds of criminals snatching your refund. Thieves use stolen personal information to file fake returns in an attempt to claim taxpayer refunds. If successful, the con cuts in front of the honest taxpayer, who doesn’t learn about the theft until (s)he gets an error message (when attempting to file electronically) or a letter from the IRS saying they’ve already filed.

Months may pass before the situation can get sorted.

However, if, for any reason — even if that reason is you simply cannot be bothered with tax prep when the azaleas are in bloom — the IRS is perfectly happy to grant you an automatic six-month extension. Simply fill out and file Form 4868, the application for automatic extension of time to file a U.S. individual tax return.

Deliver Form 4868 before midnight April 18, and you can postpone filing your return until October 15. Again, make certain your taxes are paid in full by the April 18 deadline; your application for an automatic extension is to delay completing and filing your paperwork. But that can be handy.

Postponing when you file has its downside: Refunds are not processed until returns are filed and approved.

How Long Does It Take to Get Your Tax Refund?

Taxpayers who receive refunds the quickest follow this single rule: Make it easy on the IRS.

This doesn’t mean you have to file a simple return: One job, standard deduction, zero tax credits. Your return can involve two jobs, rental properties, a brokerage account, assorted random gigs, gambling losses, alimony payments, and a home-office deduction, and if you make it easy on the IRS (and you’re getting money back), your refund can be as quick as anyone’s, simply by doing these two things:

  • File electronically.
  • Sign up for direct deposit.

Do these two simple things, and the wait for your tax refund probably will not exceed 21 days.

Methods for filing electronically include the IRS’ free-file service (if your adjusted gross income is below $73,000); the IRS’s free-file fillable forms service; all big-name tax software packages; and reliable tax preparers.

Struggling with your return? Local community-based organizations can help, including nonprofit credit counselors.

Paper tax returns that arrive by U.S. Mail take significantly longer to process — a minimum of six to eight weeks, even for simple returns. Even as it works to clear the backlog of paper returns from tax year 2021, the IRS reports that paper returns filed during tax season 2023 may require more than six months to process.

If you’re counting on a refund, that’s a long time to wait.

Tom Jackson focuses on writing about debt solutions for consumers struggling to make ends meet. His background includes time as a columnist for newspapers in Washington D.C., Tampa and Sacramento, Calif., where he reported and commented on everything from city and state budgets to the marketing of local businesses and how the business of professional sports impacts a city. Along the way, he has racked up state and national awards for writing, editing and design. Tom’s blogging on the 2016 election won a pair of top honors from the Florida Press Club. A University of Florida alumnus, St. Louis Cardinals fan and eager-if-haphazard golfer, Tom splits time between Tampa and Cashiers, N.C., with his wife of 40 years, college-age son, and Spencer, a yappy Shetland sheepdog.

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    1. Dore, K. (2023, February 10) IRS says many state rebates aren’t taxable at the federal level. Some may face filing struggle, tax pros warn. Retrieved from https://www.cnbc.com/2023/02/10/irs-issues-state-rebate-guidance-for-taxpayers-urged-to-delay-filing.html
    2. Berry-Johnson, J. (2022, October 24) The IRS Is Supersizing Standard Deductions For 2023. Is That Good For Your Taxes? Retrieved from https://www.forbes.com/advisor/taxes/standard-deduction/
    3. N.A. (2022, December 6) Get Ready for taxes: What's new and what to consider when filing in 2023. Retrieved from https://www.irs.gov/newsroom/get-ready-for-taxes-whats-new-and-what-to-consider-when-filing-in-2023
    4. N.A. (2022, December 20) Recovery Rebate Credit. Retrieved from https://www.irs.gov/newsroom/recovery-rebate-credit
    5. N.A. (2022, October 7) The Premium Tax Credit — The Basics. Retrieved from https://www.irs.gov/affordable-care-act/individuals-and-families/the-premium-tax-credit-the-basics
    6. N.A. (2023, February 2) Credits for New Electric Vehicles Purchased in 2022 or Before. Retrieved from https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before
    7. N.A. (2022, September 29) IRS provides tax inflation adjustments for tax year 2022. Retrieved from https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022
    8. N.A. (2023, February 8) The Fastest Way to Get Your Tax Refund. Retrieved from https://www.nerdwallet.com/article/taxes/fastest-tax-refund
    9. N.A. (2022, September 13) About Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Retrieved from https://www.irs.gov/forms-pubs/about-form-4868
    10. N.A. (2023, January 11) What to Expect for Refunds This Year. Retrieved from https://www.irs.gov/refunds/what-to-expect-for-refunds-this-year
    11. Chappell, B. (2023, January 22) Your tax refund will likely be smaller this year. Here are more things to know. Retrieved from https://www.npr.org/2023/01/22/1150300686/tax-refund-irs