Taxes.
What was the first thing that came to mind when you saw that word?
A burdensome charge? Obligation? Penalties? A refund?
Those that file their taxes earliest are likely anticipating a refund. For some, these funds are counted on – year after year.
How are tax refunds used?
Mostly to pay bills
- Rent
- Medical bills
- Accumulated debt (credit cards)
- Utilities
- Gas
- Groceries
- Entertainment
- Electronics
- Dinners out
- Vacation
- Life event
- Wedding
- Home purchase
What happened to refunds this year?
I have heard from person after person that their refund is so much smaller this year than it has been in the last couple of years. The financial stress they are already experiencing due to rising food, daycare, rent and utility costs is now compounded. The large tax refund that would have helped offset some of these increases is not coming.
What the IRS is saying–
According to the IRS smaller refunds should be expected due to pandemic relief expiring. The last stimulus payment was in 2021. Millions received those payments as a recovery rebate credit, which showed on their tax return.
Beyond the stimulus payments, millions received expanded child tax credit funds. This credit expired at the end of 2021.
Other tax breaks that have been allowed to expire: deduction for charitable donations; expansion of earned income tax credit; and the child and dependent care tax credit returns from $8,000 to $2,100.
Ready to file your taxes?
Take advantage of free services. If you or your family earned $73,000 or less in 2022 your may use one of seven partners working with the IRS to provide free options.
To find the right IRS Free File product taxpayers can:
- Go to IRS.gov/freefile,
- Click on Use Free Guided Tax Preparation. Then select IRS Free File Online Lookup Tool for help in finding the right product, or
- Use the Browse All Offers tool to review each offer,
- Select the best product for them, and
- Follow the links to the provider’s website to begin their tax return.
No computer? No problem. IRS Free File products support mobile phone access. Taxpayers can do their taxes on their smart phone or tablet.
IRS Free File participants
For 2023, the following providers are participating in IRS Free File:
- 1040Now
- ezTaxReturn.com
- FileYourTaxes.com
- On-Line Taxes
- TaxAct
- FreeTaxUSA
- TaxSlayer
Debt Exceeds Refund?
If you are unable to pay off all your unsecured debt with your 2022 tax refunds, consider your bankruptcy options and learn how you can live debt free in 2023. Your tax refund can be used towards bankruptcy fees. Use your tax refund to eliminate your debt and stress so you can have a happier 2023 with your family.