The Internal Revenue Service has made some adjustments that tax filers should keep in mind this tax season.
For starters, there are changes to the child tax credit and child and dependent care credit.
Jim Schnell, a tax partner with MMB + CO, explained what the changes mean.
“The enhanced child tax credit is something that did not reoccur in 2022. So what had been up to $3,600 per child is now back down to the pre-COVID era, $2,000 per child," Schnell said. "The earned income tax credit for individual filers without children has gone down from $1,500 to $500. The dependent care credit, child care credit has gone down again to pre-COVID levels."
What You Need To Know
- The IRS has made some adjustments that tax filers should keep in mind this tax season
- Some of the biggest adjustments include changes to the Child Tax Credit, and Child and Dependent Care Credit
- A few other changes that may mean smaller refunds involve the Earned Income Tax Credit as well as an adjustment to above-the-line charitable donations
- Experts said it's more of a return to pre-COVID ways
A few other changes that may mean smaller refunds involve the earned income tax credit as well as an adjustment to above-the-line charitable donations.
The IRS said those who take a standard deduction may not take an above-the-line deduction for charitable donations.
But it’s not all doom and gloom.
The IRS said more people may be eligible for the premium tax credit, and there are still ways to claim a tax credit on clean energy vehicles.
Plus, as Schnell said, the process is becoming a bit simpler.
“We're already seeing an easier way for people to harness their information, understanding their year-end documents that came to them, everything being what they're used to seeing or what is familiar to them," Schnell said.
Schnell, as well as John Marshal – a CPA in senior counsel with Bonadio Group – both said this would be a good year to do energy improvements to your home because you may be eligible for tax credits during next year’s tax season.
Schnell also said there are federal incentives to switch to solar energy that people can look into.
The IRS says April 18 is the tax deadline.