(WHTM) — The deadline to file your taxes this year is Tuesday, April 18, and many people expecting a refund have already filed. But why will they get less money than last year?
Refunds are shrinking this year and the Internal Revenue Service (IRS) just announced that the average refund this year is $360 less than last year, which is not good news at a time of high inflation.
As the IRS processes millions of returns this month, it says the average tax refund is $2,903 this year, 10 percent less than one year ago when the average refund was over $3,000.
Jessica McDaniel noticed her tax return is down this year.
“The limits for what you can get on child tax credit have been lowered, so it’s half normal,” McDaniel said.
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Karen Short is not even getting a refund this time.
“No, I’m not getting one. I am a single parent, I’m single and my kids are all grown,” said Short.
Your refund may be smaller this year for all sorts of reasons, but for the majority of people, it all comes down to the end of pandemic benefits that boosted our refunds the past couple of years.
“People are going to see a little bit less in their refunds, because no more stimulus, no more augmented earned income tax credit, child credit,” said Luis Garcia of the IRS.
Garcia also said refunds are now mostly based on your income and withholding, not expanded pandemic benefits.
The other reason for smaller refunds is that most taxpayers can no longer deduct charitable contributions, such as clothing donations to Goodwill. Unless you itemize your deductions, and most people don’t, you can’t boost your refund by donating to charity.
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For millions of Americans, tax refunds will not be as helpful.
The worst part of the smaller refund checks is that families need them more than ever with inflation hitting their finances hard and no stimulus checks to fall back on.