The IRS released a press statement on January 23, 2023, marking the beginning of tax filing season. This tax filing period, which runs from January to April 2023, is for their 2022 tax returns. They wil l provide details about the money that made the previous year, and in some situations, they will get a refund (or in other cases, they may owe taxes).
The IRS issued a crucial caution on the effect of stimulus payments on the tax return they will submit this year in its news release. The IRS specifically said that because there were no government stimulus payments made last year, they might not get the full amount of their tax return.
Since many people depend on their tax refunds to aid in debt repayment, account growth, or the achievement of other significant financial objectives, it is crucial that everyone read and comprehend this IRS caution so that they are not taken by surprise.
Stimulus Checks
Your tax refund might be less than it was during the previous tax filing season for two main reasons, according to an IRS news release.
According to an IRS news release, “many taxpayers may find their refunds substantially lower this year due to tax law changes including as the loss of the Advance Child Tax Credit and no Recovery Rebate Credit this year to collect pandemic-related stimulus money.”
The $1,400 check made possible by the American Rescue Plan Act was known as the Recovery Rebate Credit. The American Rescue Plan Act also increased the Child Tax Credit, giving parents $3,600 for kids under the age of six and $3,000 for kids between the ages of six and seventeen. These sums applied to each child.
Millions of Americans received additional tax credits totaling thousands of dollars when they filed their 2021 tax returns in 2022 as a result of these two stimulus payments. However, as none of these stimulus check programs was extended in 2022, if you grew accustomed to receiving that sizable refund due to the stimulus checks, you are likely to be extremely disappointed this year when you receive considerably less money from the IRS.
Tax Refund
It might be difficult to deal with the financial repercussions if they were expecting a larger return than they actually receive, especially if they set aside the money for a significant purchase.
The good news is that they may find other ways to earn more money to support their financial objectives. Anyone could receive a payout depending on where they reside as some states still intend to hand out stimulus funds in the upcoming months. There are several options to start a side business and earn extra money.
It’s crucial to pay attention to the IRS’s warning, be aware that their return could be smaller than they expected, and make alternative preparations to make up for this deficit if they were depending on the money arriving.
Other Reports, Side Hustle
A recent research found that 34% of Americans run a side business. Three out of ten (31%) of those who have a side business started it during the epidemic, and two-thirds (67%) of those who have one did so during the last five years. Another one in every four plans to start one soon, showing that the tendency is spreading.
A side business may boost their earnings and promote financial independence. Many people are inspired to learn a new skill or do something they like, which can also help them diversify their sources of income.
