Tax season can be both relieving and disappointing as individuals eagerly wait for their tax refunds from the IRS. In several situations, it has been seen that some taxpayers do find themselves quite upset when the amount of the refund is less than what they had expected or lower than what they had initially seen when they had filed for their tax return.
The question that arises therefore is, why is someone’s tax refund less than expected for the year 2023? Interestingly, there are quite a few features that could contribute to a lower-than-expected tax refund. Firstly, the tax benefits that had been introduced under the American Rescue Plan went through a few changes or were eliminated completely for the tax year 2022. This implies that most of the tax credits, such as the Child and Dependent Tax Credit, Child Tax Credit, and Earned Income Tax Credit, went back to the provisions or were removed completely.
Why Is Your Tax Refund Lower Than Expected?
The IRS has already brought forth multiple announcements where they have warned the taxpayers that their tax refund could be smaller than what they had anticipated. The changes to the tax provisions have had quite a major impact on tax refunds for the current tax season. Also, it is believed that the IRS could also be making adjustments to one’s refund due to multiple discrepancies between the information that was reported on the tax return and the information that people have on file.
The Treasury Offset Program is yet another factor that can potentially reduce your tax refund amount. This program is wholly responsible for collecting overdue bills that were owed to federal and state agencies.