Taxes are an essential part of any country’s economy and filing them can be a tedious task. For many, the tax refund is a vital source of income that can help meet expenses or save for the future. However, there are three big issues that could delay your tax refund in 2023. It is essential to be aware of these issues and prepare accordingly to avoid any unnecessary delays.
The COVID-19 pandemic has impacted every aspect of our lives, including the IRS. In 2020 and 2021, the IRS faced significant challenges due to office closures, staff shortages, and delays in processing tax returns. As a result, the tax deadline was extended in both years. With the pandemic still ongoing, there is a possibility that the IRS may face similar challenges in 2023, which could impact tax refunds.
Furthermore, changes in tax laws could impact the processing of tax returns and refunds. The American Rescue Plan Act (ARPA) brought about several changes to the tax laws, including the Child Tax Credit, Earned Income Tax Credit, and the Premium Tax Credit. The IRS may need to update its systems and processes to accommodate these changes, which could result in delays.
In this article, we’ll discuss the three significant issues that could impact your tax refund in 2023.
Issue #1: The Impact of COVID-19 on the IRS
The COVID-19 pandemic has impacted every aspect of our lives, and the IRS is no exception. In 2020, the IRS faced several challenges due to the pandemic, including office closures, staff shortages, and delays in processing tax returns. As a result, the IRS extended the tax deadline from April 15 to July 15, 2020.
In 2021, the IRS faced similar challenges, and the tax deadline was once again extended to May 17, 2021. However, with the pandemic still ongoing, there is a possibility that the IRS may face similar challenges in 2023, which could impact tax refunds.
The pandemic has not only impacted the IRS staff’s ability to work but also caused an economic downturn, leading to changes in the taxpayer’s financial situations. With the pandemic ongoing, the IRS may struggle with the same level of resources to handle an influx of taxpayers filing their returns and seeking their refunds.
What to Do: Be prepared for potential delays in processing tax returns and refunds in 2023. Make sure to file your tax return as early as possible to avoid any further delays. Also, consider e-filing your tax return, as it can speed up the process and reduce errors. You can also check the status of your refund on the IRS website using their “Where’s My Refund” tool.
Issue #2: Changes to Tax Laws
Tax laws are subject to change, and any significant changes could impact the processing of tax returns and refunds. In 2021, the American Rescue Plan Act (ARPA) brought about several changes to the tax laws, including the Child Tax Credit, Earned Income Tax Credit, and the Premium Tax Credit.
The changes to the tax laws could impact the processing of tax returns and refunds, as the IRS may need to update its systems and processes to accommodate the changes. This could result in delays in processing tax returns and refunds.
What to Do: Stay informed about any changes to tax laws and how they could impact your tax return and refund. Consult with a tax professional to ensure that you are aware of all the changes and how they could affect your tax return. Review your tax return to ensure that you are taking advantage of any new tax credits or deductions.
One such example is the Child Tax Credit, which has been expanded under the ARPA. The credit is now up to $3,000 per child under 18 and up to $3,600 for children under age 6. This expansion is temporary and only for the 2021 tax year. Ensure that you claim the credit correctly and that you are eligible for it.
Issue #3: Errors on Your Tax Return
Errors on your tax return could also delay your tax refund. Common errors include incorrect social security numbers, incorrect income information, and incorrect deductions or credits. If the IRS identifies an error on your tax return, they will send you a notice asking for more information or clarification. This can result in delays in processing your tax return and refund.
What to Do: Double-check your tax return for any errors before submitting it to the IRS. Consider using a check stub maker to ensure that your income information is accurate. If you receive a notice from the IRS requesting more information, respond promptly and provide the necessary information. If you’re unsure about how to respond or need assistance, consult with a tax professional.
Conclusion:
In conclusion, there are several big issues that could delay your tax refund in 2023. These include the impact of COVID-19 on the IRS, changes to tax laws, and errors on your tax return. It’s essential to be aware of these issues and take steps to avoid any unnecessary delays in processing your tax return and refund.
By filing your tax return as early as possible, staying informed about any changes to tax laws, double-checking your tax return for errors, and responding promptly to any requests for information from the IRS, you can ensure that your tax refund is processed in a timely and efficient manner.
Remember that tax refunds are your money, and delays in receiving them can impact your financial stability. So, take the necessary steps to avoid any potential delays in getting your tax refund.
