A last-minute guide to filing your 2022 return: EV credits, shrinking refunds and the end of pandemic tax relief
Published in Home and Consumer News
With weeks to go before the April 18 deadline, the majority of the nation’s 168 million tax filers are once again scrambling to download software, organize receipts and call their accountants for last-minute help.
Procrastinators may find what early filers already know: Tax year 2022 is not producing as many happy returns as in previous years due to a number of changes, including the expiration of some pandemic-era tax breaks.
“People will be getting smaller refunds on average because of that,” said Dan Rahill, a longtime Chicago tax partner and past chairman of the Illinois CPA Society, who now serves as a wealth strategist at Wintrust Wealth Management.
From a reduced child tax credit to the end of a charitable tax break that allowed for an above-the-line deduction last year, the changes are most likely to erode refunds that have become the norm during the pandemic.
For the 63 million people who had already filed their tax returns as of March 10, the average refund is down 11% to $2,972, according to the latest IRS data.
That refund decline could get even steeper as the rest of the returns come in.
“The people that want to get it done right away are the ones that expect that refund, and they want to get that money back,” Rahill said. “If they don’t expect a big refund, there’s no urgency to file.”
On the upside, expanded EV tax credits and other clean energy initiatives from the Inflation Reduction Act, signed in August by President Joe Biden, could help boost refunds for some tax filers this year. And millions of Illinois filers are getting a small measure of relief from the IRS for those one-off state “tax rebate” checks mailed in September.
Here are some key changes to look for in the 2022 return.
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