A reduction in the amount of tax refund that you are entitled to receive may occur if you experience a change in your income or if you become ineligible for a tax credit or deduction.
Why is my refund different than the amount on the tax return I filed? All or part of your refund may have been used (offset) to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans.
If your refund was less than you expected, it may have been reduced by the IRS or a Financial Management Service (FMS) to pay past-due child support, federal agency nontax debts, state income tax obligations, or unemployment compensation debts owed to a state.
The more you earn, the higher your rate of tax is and the more tax you pay. So if your income goes up from one year to the next it might push you into a higher tax bracket which could drop your refund. How to avoid next year: If your income goes up, pay close attention to the deductions you might be entitled to.
The average tax refund in 2022 (for the 2021 tax year) was almost $3,200, a 14% jump from the prior year, according to IRS data. But the benefits that juiced refunds this year have largely lapsed, ranging from federal stimulus checks to the expanded Child Tax Credit (CTC), Steber noted.
Average tax refund in 2022: $3,039
The average individual income tax refund was $3,039 for the 2021 tax-filing year, a 7.5% increase from 2020 when the average refund was $2,827.
“Refunds may be smaller in 2023,” the IRS said in a November news release. “Taxpayers will not receive an additional stimulus payment with a 2023 tax refund because there were no economic impact payments for 2022.”
At tax time, it is quite likely that they have not paid a sufficient amount of tax throughout the year; as a result, they may receive a tax return that is much less than they anticipated, and in certain circumstances, they may even owe money to the ATO. The likelihood of this happening is considerable.
Based on the 2021 financial year, the average tax return was $2,800. If you're not getting anywhere near that amount, it might be time to find out how you can maximise tax time this year. What Can You Claim?
It's typical for the standard deduction to increase a little each year, along with the rate of inflation. For your 2022 tax return, the standard deduction for single tax filers has been increased to $12,950 (up by $400), and has been bumped to $25,900 for those married filing jointly (up by $800).
When it comes to federal income tax rates and brackets, the tax rates themselves aren't changing from 2022 to 2023. The same seven tax rates in effect for the 2022 tax year – 10%, 12%, 22%, 24%, 32%, 35% and 37% – still apply for 2023.
There are a few reasons for tax refund delays. They could be caused by you: maybe there was an error in your filed return, maybe you needed to resubmit an amended return, maybe you claimed the earned income tax credit, or maybe you or your tax professional made a simple math error.
The 2022 tax rates themselves are the same as the rates in effect for the 2021 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, as they are every year, the 2022 tax brackets were adjusted to account for inflation.