Smaller Tax Refunds in 2023: These days in the United States of America, inflation is a cause of concern. Inflation is a situation where the prices of essential commodities increase. This kind of situation makes it difficult for the citizens to survive. The government should do something in order to alleviate the citizens from the wrath of inflation. However, as the people face the wrath of inflation it is also implied that the state will be under an economic crunch so you expect Smaller Tax Refunds in 2023! Keep reading to know more about the current status of the IRS Refund Amount.
Sometimes, the government provides unemployment benefits to their citizens so that they can face inflation. In this post, we will talk about how Americans are relying upon tax refunds to survive amid inflation. So, if you are someone who is a citizen of the United States of America, then this post might be useful for you as we will tell you all about the tax refunds which you will be receiving and how much of it will be received by you.
Inflation affects everyone be they rich or poor. It affects the whole economy and the GDP of the country and also decreases your savings!
Smaller Tax Refunds in 2023
Nearly 50% of Americans are waiting for their tax refunds as they are facing high inflation. These tax refunds can be of little help to them in this difficult economic situation. Recently, a survey was also done by Bankrate and according to the survey, around 43% of Americans say that the refund is very important for them and 32% of them described it as “somewhat important”. The note to be noted here is that in 2022, 67% of Americans were relying upon their refund. That means this is 10 % points higher than what it was in 2022. This point is very important as it shows how much then inflation has impacted the lives of the people and how much they are relying upon their tax refunds.
Smaller Tax Refunds in 2023 Overview
|Name||Smaller Tax Refunds in 2023|
|Income Tax Eligibility||$150,000 or less|
|Last Date for Filing||17th April 2023|
|Payment Type||Economic Impact Payment|
|Where is my refund portal||https://www.irs.gov/refunds|
High Inflation Rates Leading to a Decline in Tax Refunds
One thing which is worth mentioning is that this year the IRS has warned Americans to be ready for a smaller refund this year. This may come as sad news for the citizens of the US who are already facing the wrath of inflation. According to the experts, the IRS has issued almost 28 million refunds till 17 Feb 2023 and interestingly this amount is 26% higher than the last year.
Follow are the reasons for the small tax refunds in 2023:
- Recession and inflation have affected the regular functioning of the state and the GDP of the US has declined
- The future growth rate pattern also seems bleak at the moment and as many tax filers are having trouble getting their minimum refund amount as well
- The IRS stimulus payments were introduced in 2020 to curb the effects of the pandemic on the people, the same has been bravely carried into 2023 as well however the requirement, benefits, and deductions are no longer the same.
The reason behind smaller tax refunds this year is that many pandemic-related tax breaks have expired. According to the experts the smaller tax refunds this year is a cause of concern for the citizens.
Why are you still getting IRS Refunds?
The question which arises is when the tax refunds are paid. These are paid when the taxpayers had too much money withheld and overpaid their taxes in the previous year. The question is basically why get refunds in the first place? In 2020, the Covid-19 IRS Stimulus Payment was introduced and everyone knew that these payments will only be limited to this bad period. The state had no different plans than this as well, however looking at the recession forming up in the US in 2022 and inflation causing huge cash, the state introduced IRS Stimulus Forth Instalment.
You can also check out these Articles
- your tax return
- IRS Publication 525
- IRS Tax Refund 2023
- IRS PTIN Renewal 2023
- Increase Your Tax Refund
- How to Avoid an IRS Audit
- Smaller Tax Refunds in 2023
You may still be getting your refunds, but this time the refunds will be smaller than in past years. The motive, schemes, and many other benefits are only provided until covid has expired.
Effects of Decreased Refund Amount
- This decrease in the refund amount will affect millions of Americans who depend upon the influx of money for various reasons like making some big purchases or saving up for their retirement or paying up some debt.
- It is actually very disheartening to see that the citizens are already grappling with a high cost of living crisis that has pushed the price of everyday commodities like rent, food, etc.
- But the point which is worth noting is that the tax refund is not free money anyway. It is basically the money which are you are getting back and which you have lent to the government at 0% interest all throughout the last year.
According to a finance expert, a tax refund can be considered an effective use of cash. Thus, the state never plans to have a nation that depends on refunds for its savings. Refunds are currently being provided for hard times and the government plans to always have the back of their people but refunds will not be a permanent mechanism.