ROCHESTER, N.Y. (WROC) — Tax filing season is already well underway, and experts are saying that many returns could come back later than expected.
Dave Young is a certified public accountant and managing partner of Young & Company CPAs. For 2022 tax returns, he says that the following federal changes are likely contributing to low returns.
- The end of pandemic stimulus checks
- The reduction of the child tax credit
- The elimination of the IRS charity deduction
Young says on the whole, these returns are lower because these changes reflect a post-pandemic approach, and more or less represent a return to normal.
He says when it comes to filing, getting the returns in sooner than later are going to be the most help.
“I think what you really need to do if people need to be proactive when it comes to their tax return,” he said.
When returns come in earlier, Young says you have more time to work with your “friendly neighborhood CPA” to help mitigate any low returns or to avoid owing more. Primarily, he suggests moving money to your IRA or HSA.
And, he says, don’t shoot the messenger.
“The CPA is just the bearer of bad news or good news. But work with your professional and they can help mitigate anything in the past or 22,” Young said.
On stimulus checks:
“If they didn’t get them when they came in 2020 or 2021, you could get them on the 21 tax return,” Young said. “So now that’s over.”
On the child tax credit reduction:
“It could be up to $3,600 in ’21, but now it’s back to $2,000. So that’s a big change,” Young said. “If you had a child under six, you could get up to $3,600. $2,000 is now the limit.”
On the charity deduction:
“So you could take a standard deduction in the past and still give a little bit to charity and get a little something on your tax return $300,” he said. “If you were a single filer, (it was) $600, if you were a married filing joint, it’s a deduction, not a credit deduction, that’s gone as well.”