We're more than halfway through the year, and tax pros say it's a good time to tax a look at where things stand, tax-wise, for 2022. For a lot of families, the situation is going to be a little different.
"Last year the refunds were the highest ever, on average," said Bruce MacKinnon with Jackson Hewitt Tax Service.
And that's due, in part, to COVID relief legislation passed during the pandemic, temporarily boosting some tax credits.
"For example the child tax credit, which last year was increased temporarily to either $3,000 or $3,600 per child, is going back to its original rate of $2,000 per child," MacKinnon said. "It's significant."
Credits for child care will also drop significantly.
"Last year that was increased to a maximum of just over $8,000 per family," MacKinnon said. "And that drops this year back to its original rate of $2,100 per family."
Gone this year are above-the-line deductions for charitable giving, and there's a new 1099-K form for those that earn more than $600 on third-party payment apps like Venmo, Zelle and Paypal. Tax pros say now is a good time to take a look at your finances so there are no big surprises come tax time.
"Especially if your personal circumstances have changed," MacKinnon said. "Marriage, divorce, new dependents in the family, new job. Now would be a good time to step back, take a look, project your total income for the year, project your total tax you would have paid in through withholding. If any adjustments are necessary, there's still plenty of time left to have an impact by changing your withholding."
He says for those filing electronically, refunds came through quickly last year - 90% of them in three weeks or less. Paper returns, however, can take months.
