Why is my tax return so low?
Your tax refund is a big deal. If you’re like many people, tax season is a time to look forward to getting extra cash. But is it possible that you’d have a smaller tax refund than you anticipated?
If you’re wondering “Why is my tax refund so low in 2022?” — there is something behind it.
One big reason for many is that much of the pandemic related relief programs for families and individuals are no longer available. For example, expanded benefits for the Child Tax Credit and Earned Income Credit have returned to their previous amounts. Plus, one-time benefits such as the Recovery Rebate Credit have expired.
Read on and we’ll discuss some other potential reasons why your tax refund may be so low in 2022.
“Why is my tax refund so low in 2022?”
If you’re questioning “why is my tax refund so low in 2022?” you’re not the only one… Many of taxpayers filing their returns are wondering the same thing.
So, if your tax refund is less than expected for 2022, it could be due to a few reasons aside from expired pandemic relief:
- No estimated taxes with gig income: Gig employment is on the rise due to more independent contracting opportunities. But not all gig workers know they need to pay estimated taxes for this type of income. Missing this step could mean an unexpected tax bill or a low refund in 2022. Check out our tax guide for gig workers for the essentials, including covering your self-employment taxes.
- Not accounting for withholding across multiple jobs: Each job you have will result in you having to fill out a separate W-4 Form. If you didn’t account for each job across your W-4s, you may not have withheld enough, so your tax refund could be less than expected in 2022.
- Not factoring eligibility changes for tax credits and deductions: There may be other impacts on your refund due to the credits you can take. For example, if you took advantage of rules that allowed for suspended student loan payments during 2022, it may have resulted in a lower student loan interest deduction. Or if your child turned 17 during 2022, you may be eligible for a credit for other dependents worth a maximum of $500 instead of a child tax credit worth a maximum of $2,000.
Bonus tip: Learn how to better manage your withholdings through our W-4 paycheck tax calculator.
What to do if your tax refund is less than expected in 2022?
If you’re surprised by a tax refund that is less than expected in 2022, not sure why your tax refund was reduced, or the complexity around taxes has got you stressed, H&R Block is here to help.
We can help you file your taxes, check your withholding, and understand your lower tax refund.
Make an appointment to speak with a tax pro today.
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