Tax rules have been changed a lot in the last two years, so many people can expect differences in their refunds from the IRS.
Many Americans should be prepared to see less in their refund than previous tax years.
It’s possible you may even end up owing money to the IRS.
There have been changes made by the IRS that could result in smaller refunds
Child tax credit with the IRS
The child tax credit was drastically changed for 2021.
The credit is normally worth $2,000, but for 2021 it was $3,000 for children ages 6-17 and $3,600 for children 5 and under.
The credit was made 100% refundable meaning it could be seen in your tax refund.
Half of that credit was sent out early to families in 6 payments from July until Dec. of last year.
This means your child tax credit isn’t going to be $2,000, it’ll be $1,500 or $1,800.
Student loan repayments were paused in 2020 and are set to resume May 1, 2022.
Many students will not be able to write off their student loan interest because of this.
Loans were not collecting interest during this time period.
If you had a good year managing mutual funds in 2021 you may see extra taxes.
These taxes could be unexpected.
It will be less than funds accrued, but it will come as a surprise all at once when filing.
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