The 2023 Tax Filing Season is here
It’s that time of year again, and with the April 18 federal tax deadline fast approaching, it’s crucial to be aware of what to expect from your 2023 tax filing.
According to the IRS, around 168 million households and individuals are expected to file their taxes this year. Here’s some information and guidance for individuals who haven’t submitted their taxes yet this 2023 tax filing season, which is based on data from the IRS and insights provided by tax specialists.
Tax refunds are down 10%
The IRS expects around 168 million households or individuals to file this 2023 tax filing season, with about 7 in 10 taxpayers expected to do so in the next few weeks. However, if you’re expecting a refund, it’s important to note that refunds are down by an average of 10% compared to last year, due to the expiration of pandemic benefits such as stimulus checks and the expanded Child Tax Credit. The typical tax refund is about $3,170 so far in 2023, down from $3,529 at the same time last year, CBS News reported.
READ ALSO: 2023 Child Tax Credit Age Eligibility Update: See Who Qualifies!
IRS is processing tax returns faster
The IRS is processing tax returns faster this 2023 tax filing season, with an increase of 4.3% in processed returns compared to last year, IRS data shows. The agency has invested in hiring new staff, which has improved customer service and response times. The faster processing is a welcome change after pandemic-related delays in previous tax seasons caused many refunds to be delayed.
Extensions from the IRS
This 2023 tax filing season, taxpayers can get an extension from the IRS to file their taxes for an additional six months if they are not ready by the federal deadline of April 18. However, it is important to note that this extension only applies to filing, not paying what is owed to the IRS.
Don’t overlook available credits and deductions
Taxpayers shouldn’t overlook other available deductions and credits in the 2023 tax filing season.
The Child Tax Credit still exists, and eligible parents with college-aged children can claim the American Opportunity Tax Credit or the Lifetime Learning Credit. Low- or middle-income taxpayers may be eligible for the Earned Income Tax Credit, and those with side gigs or freelance income should claim deductions for business-related expenses. The home office deduction is also a valuable tax benefit for self-employed individuals.
In summary, with just six weeks left until the deadline, it’s essential to be prepared for your 2023 tax filing. Knowing what to expect and understanding the available credits and deductions can make a significant difference to your bottom line. And, if you need extra time to file, remember to request an extension, but be sure to pay what you owe to avoid penalties.
READ ALSO: Filing An Income Tax in 2023: Here’s What You Need To Know
